B Co Owned 70% of the Voting Common Stock of C

question 19

Essay

B Co. owned 70% of the voting common stock of C Corp.; C Corp. owned 20% of B Co. For 2011, B Co. and C Corp. reported net income (not including the investment) of $600,000 and $300,000, respectively. B Co. and C Corp. paid dividends of $80,000 and $60,000, respectively.
Required:
Prepare a schedule showing B Co.'s share of consolidated net income for 2011 using the treasury stock approach.

---

Definitions:

Economic Equivalent

A financial concept that refers to the equivalence in value between different sums of money received or paid at different times, based on a specified interest rate.

Previous March

Refers to March of the preceding year or the last March that occurred before the current date.

Original Investment

The initial amount of money invested in a financial venture or asset.

Interest Rate

The specific rate at which interest is incurred on borrowed cash from a lender to a borrower.