Padhy Corporation Owns 80% of Abrams Corporation,Abrams Corporation Owns 60

question 18

Essay

Padhy Corporation owns 80% of Abrams Corporation,Abrams Corporation owns 60% of Bacud Corporation,and Bacud Corporation owns 10% of Abrams Corporation.The separate net incomes (excluding investment income)of Padhy,Abrams,and Bacud are $300,000,$100,000,and $80,000,respectively.Assume the investments were acquired at a cost equal to the book value of each investment,which also equals the fair value.
Required:
Calculate the controlling interest share of consolidated net income and the noncontrolling interest shares for Padhy Corporation and its subsidiaries.Use the conventional method for your solution.

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Definitions:

Good Faith

Honesty in fact and observance of reasonable commercial standards of fair dealings in the trade.

Boards of Directors

Groups of elected or appointed members who jointly oversee the activities of a company or organization, making strategic decisions and ensuring legal compliance.

Derivative Suit

A lawsuit brought by a corporation's shareholders on behalf of the corporation against parties allegedly causing harm to the corporation.

State Legislation

Laws and regulations enacted by the legislative bodies of individual states within a federal system, as opposed to federal legislation which is enacted by the national government.