Business, 16.06.2020 17:57 isabellesmith51317

On January 1, 2017, Jones Company bought 15% of "Whitton Company". Jones paid $150,000 for these shares, an amount that exactly equaled the proportionate book value of Whitton. On January 1, 2018, Whitton acquired 80% ownership of Jones. The following data are available concerning Whitton's acquisition of Jones: Consideration transferred for 80% interest, January 1, 2018: $800,000
Jones' reported book value, January 1, 2018: 900,000

Excess fair value over book value (assigned to trademarks) is amortized over 20 years. The initial value method is used by both companies. The following information is available regarding Jones and Whitton:

Jones Company Whitton Company
Year Reported Separate Income Dividend Income Dividends Declared Reported Separate Income Dividend Income Dividends Declared
2017 $40,000 $6,000 $10,000 $120,000 $0 $40,000
2018 50,000 9,000 $14,000 $140,000 $11,200 $60,000

Required:
Compute Whitton's accrual-based consolidated net income for 2018.

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On January 1, 2017, Jones Company bought 15% of "Whitton Company". Jones paid $150,000 for these sha...

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