James Company purchased 100% of the outstanding stock of Hardware Corporation on July 1, 2016 for $1,200,000. Hardware reports annual revenue of $225,000 and expenses of $180,000. The revenues and expenses were evenly spread throughout the year. What amount of revenues and expenses earned by Hardware, should James report on its consolidated income statement prepared on December 31, 2016 subsequent to the date of acquisition? Revenues $112,500; Expenses $90,000 Revenues $157,500; Expenses $126,000 Revenues $225,000; Expenses $180,000 Revenues and expenses of subsidiary are not reported. Revenues $67,500; Expenses $54,000

James Company purchased 100% of the outstanding stock of Hardware Corporation on July 1, 2016 for $1,200,000. Hardware reports annual revenue of $225,000 and expenses of $180,000. The revenues and expenses were evenly spread throughout the year. What amount of revenues and expenses earned by Hardware, should James report on its consolidated income statement prepared on December 31, 2016 subsequent to the date of acquisition? Revenues $112,500; Expenses $90,000 Revenues $157,500; Expenses $126,000 Revenues $225,000; Expenses $180,000 Revenues and expenses of subsidiary are not reported. Revenues $67,500; Expenses $54,000

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter16: Advanced Topics Concerning Complex Auditing Judgments

Section: Chapter Questions

Problem 55RSCQ

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