James Company acquired 85 percent of Mark-Right Company on April 1. On its December 31 consolidated income statement, how should James account for Mark-Right’s revenues and expenses that occurred before April 1?a. Include 100 percent of Mark-Right’s revenues and expenses and deduct the preacquisition portion as noncontrolling interest in net income.b. Exclude 100 percent of the preacquisition revenues and 100 percent of the preacquisition expenses from their respective consolidated totals.c. Exclude 15 percent of the preacquisition revenues and 15 percent of the preacquisition expenses from consolidated expenses.d. Deduct 15 percent of the net combined revenues and expenses relating to the preacquisition period from consolidated net income.
James Company acquired 85 percent of Mark-Right Company on April 1. On its December 31 consolidated income statement, how should James account for Mark-Right’s revenues and expenses that occurred before April 1?
a. Include 100 percent of Mark-Right’s revenues and expenses and deduct the preacquisition portion as noncontrolling interest in net income.
b. Exclude 100 percent of the preacquisition revenues and 100 percent of the preacquisition expenses from their respective consolidated totals.
c. Exclude 15 percent of the preacquisition revenues and 15 percent of the preacquisition expenses from consolidated expenses.
d. Deduct 15 percent of the net combined revenues and expenses relating to the preacquisition period from consolidated net income.
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