Summer Company sells all its output at 25 percent above cost. Parade Corporation purchases all its inventory from Summer. Selected information on the operations of the companies over the past three years is as follows: Summer Company Parade Corporation
Year Sales to Parade Corp. Net Income Inventory, Dec. 31 Operating Income
20X2 $211,000 $119,000 $73,850 $170,000
20X3 186,000 109,000 111,600 256,000
20X4 264,000 179,000 140,800 312,000

Parade acquired 70 percent of the ownership of Summer on January 1, 20X1, at underlying book value

Compute consolidated net income and income assigned to the controlling interest for 20X2, 20X3, and 20X4

Which of the following statements is correct? a major disadvantage of a partnership relative to a corporation is the fact that federal income taxes must be paid by the partners rather than by the firm itself. in a typical partnership, liability for other partners’ misdeeds is limited to the amount of a particular partner’s investment in the business.true in a limited partnership, the limited partners have voting control, while the general partner has operating control over the business, and the limited partners are individually responsible, on a pro rata basis, for the firm’s debts in the event of bankruptcy. partnerships have more difficulty attracting large amounts of capital than corporations because of such factors as unlimited liability, the need to reorganize when a partner dies, and the illiquidity of partnership interests.