Asked by
Lemar Brown
on Dec 10, 2024
Verified
Scott Co. paid $2,800,000 to acquire all of the common stock of Dawn Corp. on January 1, 2020. Dawn's reported earnings for 2020 totaled $512,000, and it paid $160,000 in dividends during the year. The amortization of allocations related to the investment was $28,000. Scott's net income, not including the investment, was $3,310,000, and it paid dividends of $950,000.What is the amount of consolidated net income for the year 2020?
A) $3,150,000.
B) $3,282,000.
C) $3,310,000.
D) $3,794,000.
E) $3,822,000.
Consolidated Net Income
The total net income of a parent company and its subsidiaries after the elimination of inter-company transactions, presented in consolidated financial statements.
Amortization
The practice of slowly allocating the initial expense of an intangible asset across its productive lifespan.
Dividends
Payments made by a corporation to its shareholder members, typically derived from the company's earnings.
- Evaluate the aggregate net income, incorporating considerations of earnings from subsidiaries and the impact of amortization.
Verified Answer
MT
Learning Objectives
- Evaluate the aggregate net income, incorporating considerations of earnings from subsidiaries and the impact of amortization.