Question on 1st january 2011 phoenix co acquired 100 of

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Reference no: EM13349315

Question :

On 1^st January, 2011, Phoenix Co. acquired 100 % of the outstanding voting shares of Sedona, Inc. for $600,000 cash. At 1^st January, 2011, Sedona's net assets had entire carrying amount of $420,000. Equipment (eight-year remaining life) was undervalued on Sedona's financial records by $80,000. Any outstanding excess fair over book value was attributed to a customer list prepared by Sedona (four-year remaining life), but not recorded on its books. Phoenix applies the equity technique to account for its investment in Sedona. Every year since the acquisition, Sedona has paid a $20,000 dividend. Sedona recorded income of $70,000 in 2011 and $80,000 in 2012.

Chosen account balances from the two companies' individual records were as given:

Phoenix Sedona

2013 Revenues $498,000 $285,000

2013 Expenses 350,000 195,000

2013 Income from Sedona 55,000

Retained earnings 12/31/13 250,000 175,000

What is consolidated net income for Sedona and Phoenix for 2013?

Reference no: EM13349315

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