Problem: Dryburgh Corporation acquired 80 percent of the voting common stock of Burns Company on January 1, 2002. The acquisition cost included a $40,000 purchase differential assigned to equipment with an estimated life of 5 years. Burns Company owns 70 percent of the voting common stock of Leith, Inc., acquired at underlying book value 3 years ago. Burns also owns 10 percent of Hawes Company which, in turn, owns 30 percent of the voting stock of Moffatt Corporation. Separate operating income and dividend data for the 5 companies for the year ended December 31, 2003 is presented below:
Separate
Operating
Income Dividends
Dryburgh $350,000 $120,000
Burns 300,000 80,000
Leith 200,000 180,000
Hawes 200,000 80,000
Moffatt 60,000 40,000
REQUIRED:
Compute Consolidated net income for 2003.