Hunter Company's Consolidated Net Income
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Hunter Company's separate operating income for 2009 is $1,400,000. Its 80-percent-owned subsidiary, Moss Company, reported net income for 2009 of $1,140,000. On January 1, 2005, Hunter sold equipment with a book value of $80,000 to Moss for $110,000. The equipment had a remaining economic life of ten years at the time of sale to Moss. Both companies use straight line depreciation and assume no salvage value. Hunter's consolidated net income for 2009 should be:
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Solution Summary
Sale of asset by subsidiary to Holding company
Elimination of profit and excess depreciation
consolidated net income
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