Small town retail owns 70% of Supplier Corporation's common stock. For the current financial year, small town supplier reported sales of $450,000 and $300,000 and expenses of $290,000 and $240,000. Based on the preceding information, what is the amount of net income to be reported in the consolidated income statement for the year under the parent company theory approach

Question

Frances Delgado

Business

27 June, 05:30

Small town retail owns 70% of Supplier Corporation's common stock. For the current financial year, small town supplier reported sales of $450,000 and $300,000 and expenses of $290,000 and $240,000. Based on the preceding information, what is the amount of net income to be reported in the consolidated income statement for the year under the parent company theory approach

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Alonso · Answer 1

Consolidated income statement

$

Sales (450,000 + 300,000) 750,000

Expenses (290,000 + 240,000) 530,000

Net Income 220,000

Explanation:

The net income to be reported in the consolidated income statement is $220,000 which is total net income of both companies