Philips has a 50% joint operation interest in Josef. Based on the following information, what amount will be presented for net income on Philips' proportionately consolidated income statement? $$\begin{array} { | l | r | r | }
\hline & \text { Philips } & \text { Josef } \
\hline \text { Revenue } & 1,000 & 2,000 \
\hline \text { Income from Josef } & 200 & \
\hline \text { Expenses } & 450 & 1,600 \
\hline \text { Net income } & 750 & 400 \
\hline
\end{array}$$
A)$200
B)$550
C)$750
D)$1,150

Question

Philips has a 50% joint operation interest in Josef. Based on the following information, what amount will be presented for net income on Philips' proportionately consolidated income statement? $$\begin{array} { | l | r | r | } 
\hline & \text { Philips } & \text { Josef } \
\hline \text { Revenue } & 1,000 & 2,000 \
\hline \text { Income from Josef } & 200 & \
\hline \text { Expenses } & 450 & 1,600 \
\hline \text { Net income } & 750 & 400 \
\hline
\end{array}$$
A)$200
B)$550
C)$750
D)$1,150

Quizplus · Accepted Answer

Philips' proportionately consolidated income statement will include its own net income plus its share of Josef's net income. Philips' net income is $750. Philips' 50% interest in Josef's net income (which is $400) adds $200 to Philips' income. Therefore, the total is $750 + $200 = $950. However, the income from Josef ($200) is already included in Philips' reported net income of $750, so the correct net income to be reported is $750, not adding the $200 again.

Philips Has a 50% Joint Operation Interest in Josef A)$200 B)$550 C)$750 D)$1,150

Philips Has a 50% Joint Operation Interest in Josef A)$200
B)$550
C)$750
D)$1,150