Femur Co. acquired 70% of the voting common stock of Harbor Corp. on January 1, 2019. During 2019, Harbor had revenues of $2,500,000 and expenses of $2,000,000. The amortization of fair value allocations totaled $60,000 in 2019. Not including its investment in Harbor, Femur Co. had its own revenues of $4,500,000 and expenses of $3,000,000 for the year 2019. What amount would Femur Co. report as consolidated net income for 2019?

Consolidated net income is $1,940,000

Explanation:

Harbor revenue                     $2,500,000

Expenses                               ($2,000,000)

amortization of fair value    ($60,000)

Net income                             $440,000

Femur revenue                     $4,500,000

expenses                               ($3,000,000)

net income                              $1,500,000

The consolidated net income is the sum of the individual net incomes of the Femur Co and Harbor Co. i.e $1,940,000($1,500,000+$440,000)

The fair value allocation is the extra depreciation charge in the year of the fair value recognition on subsidiary's asset at acquisition date

anjan should should report alteast 5000 on the first apyment and 10,000 each year

explanation:

answernaturalistic observation;