Peta Corporation and its subsidiary reported consolidated net income of $320,000 for the year ended December 31, 20X8. Peta owns 80 percent of the common shares of its subsidiary, acquired at book value. Noncontrolling interest was assigned income of $30,000 in the consolidated income statement for 20X8. What is the amount of separate operating income reported by Peta for the year

$170,000

Explanation:

Based on the information provided in the question, the amount of separate operating income that will be reported by Peta for the year goes thus:

The total income of subsidiary is calculated as:

= [30000/(100 - 80)] × 100

= (30000/20) × 100

= 1500 × 100

= 150000

Therefore, the operating income of Peta will be:

= Consolidated income - the total Subsidiary income

= $320000 - $150000

= $170000

c, theres a double tax on the business earnings