Question Help TideTide Inc owns 9090 of RockwellRockwell Cor

Question Help

TideTide?,

?Inc., owns

9090?%

of

RockwellRockwell

?Corporation, and

RockwellRockwell

owns

9090?%

of

KaufmanKaufman

Company. During

20162016?,

these? companies\' net incomes are as follows before any? consolidations:

times•

TideTide?,

times•

RockwellRockwell?,

times•

KaufmanKaufman?,

How much net income should

TideTide

report for

20162016??

Solution

Solution:

Share of income in Kaufman recognized by Rockwell = $50,000 * 90% = $45,000

Total income of Rockewell = $78,000 + $45,000 = $123,000

Share of income in rockwell recognized by Tide = $123,000 * 90 % = $110,700

Net Income to be reported by Tide for 2016 = $250,000 + $110,700 = $360,700