Kurton Inc

question 94

Essay

Kurton Inc. owned 90% of Luvyn Corp.'s voting common stock. The consideration paid exceeded book value by $110,000. Of this amount, one half is attributable to a patent and is to be amortized over 5 years. Luvyn held 20% of Kurton's voting common stock which cost $28,000 more than fair value.
During the current year, Kurton reported operating income of $224,000 and dividend income from Luvyn of $37,800. At the same time, Luvyn reported operating income of $70,000 and dividend income from Kurton of $19,600.
-Required:
Prepare a schedule to show Kurton's share of controlling interest in Luvyn's net income.

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Definitions:

Annual Corporate

This term refers to yearly activities and obligations a corporation must fulfill, including financial reporting and meetings.

Criminal Behavior

Activities that violate the laws of a jurisdiction and are punishable by the state or other authority.

Directors

Individuals elected by shareholders to oversee the management and make major policy and financial decisions for a corporation.

Officers

Individuals appointed or elected to manage and oversee the daily operations of a corporation, often holding specific titles such as CEO, CFO, or President.