On January 3,20X9,Pleat Company acquired 80 percent of Stitch Corporation's common stock for $344,000 in cash.At the acquisition date,the book values and fair values of Stitch's assets and liabilities were equal,and the fair value of the noncontrolling interest was equal to 20 percent of the total book value of Stitch.The stockholders' equity accounts of the two companies at the acquisition date are:
Noncontrolling interest was assigned income of $11,000 in Pleat's consolidated income statement for 20X9.
-Based on the preceding information,what will be the amount of net income reported by Stitch Corporation in 20X9?
A)$44,000
B)$55,000
C)$66,000
D)$36,000

Question

On January 3,20X9,Pleat Company acquired 80 percent of Stitch Corporation's common stock for $344,000 in cash.At the acquisition date,the book values and fair values of Stitch's assets and liabilities were equal,and the fair value of the noncontrolling interest was equal to 20 percent of the total book value of Stitch.The stockholders' equity accounts of the two companies at the acquisition date are:
  Noncontrolling interest was assigned income of $11,000 in Pleat's consolidated income statement for 20X9.
-Based on the preceding information,what will be the amount of net income reported by Stitch Corporation in 20X9?
A)$44,000 
B)$55,000 
C)$66,000 
D)$36,000

Quizplus · Accepted Answer

The Answer is B

On January 3,20X9,Pleat Company Acquired 80 Percent of Stitch Corporation's