On January 1, 20X7, Servant Company purchased a machine with an expected economic life of five years. On January 1, 20X9, Servant sold the machine to Master Corporation and recorded the following entry: Master Corporation holds 75 percent of Servant's voting shares. Servant reported net income of $50,000, and Master reported income from its own operations of $100,000 for 20X9. There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer.
Based on the preceding information, consolidated net income for 20X9 will be:
A) $150,000.
B) $100,000.
C) $148,000.
D) $130,000.

Question

On January 1, 20X7, Servant Company purchased a machine with an expected economic life of five years. On January 1, 20X9, Servant sold the machine to Master Corporation and recorded the following entry:  Master Corporation holds 75 percent of Servant's voting shares. Servant reported net income of $50,000, and Master reported income from its own operations of $100,000 for 20X9. There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer.
Based on the preceding information, consolidated net income for 20X9 will be:
A) $150,000. 
B) $100,000. 
C) $148,000. 
D) $130,000.

Quizplus · Accepted Answer

The Answer of On January 1, 20X7, Servant Company purchased a machine with an expected economic life of five years. On January 1, 20X9, Servant sold the machine to Master Corporation and recorded the following entry:  Master Corporation holds 75 percent of Servant's voting shares. Servant reported net income of $50,000, and Master reported income from its own operations of $100,000 for 20X9. There is no change in the estimated economic life of the equipment as a result of the intercorporate transfer.
Based on the preceding information, consolidated net income for 20X9 will be:
A) $150,000. 
B) $100,000. 
C) $148,000. 
D) $130,000.

On January 1, 20X7, Servant Company Purchased a Machine with an Expected