Find the post acquisition subsidiary net income

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Question - Company x acquired 60% of company Y on April 1, 2011 for 200,000. Equipment owned by Y was overvalued by 55,000 with a 4 year remaining life. Y earned income evenly during the year, but declared the $20,000 dividend on November 1, 2011.

Company X company Y

Sales (500,000) (285,000)

Cost of goods sold 320,000 120,0000

Expenses 25,000 35,0000

Dividend income 10,000 0

Net income 145,000 130,000

Find the post acquisition subsidiary net income?

Reference no: EM132029047

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