Business
Business, 30.10.2021 02:40, ddatsman1730

Pearson Inc. reports net income earnings of $1,170,000 while paying $120,000 in cash dividends this year. Santa Fe Co. earns $300,000 in net income and distributes $30,000 in dividends. Pearson has held a 70% interest in Santa Fe for several years, an investment with an acquisition-date fair value equal to the book value of its underlying net assets. Pearson uses the initial value method to account for these shares. On January 1 of the current year, Santa Fe acquired in the open market $150,000 of Pearson's 8% bonds. The bonds had originally been issued several years ago for 92, reflecting a 10% effective interest rate. On the date of purchase, the book value of the bonds payable was $144,900. Santa Fe paid $139,800 based on a 12% effective interest rate over the remaining life of the bonds. What is consolidated net income for this year?

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Pearson Inc. reports net income earnings of $1,170,000 while paying $120,000 in cash dividends this...

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