Palm Resorts acquired its 70 percent interest in Sun City on January 1, 2017, for $41,750,000....
Fantastic news! We've Found the answer you've been seeking!
Transcribed Image Text:
Palm Resorts acquired its 70 percent interest in Sun City on January 1, 2017, for $41,750,000. The fair value of the 30 percent noncontrolling interest at the date of acquisition was $14,750,000. Sun City's date-of-acquisition reported net assets of $5,000,000 were carried at amounts approximating fair value, but it had unrecorded identifiable intangibles, capitalizable per ASC Topic 805, valued at $7,500,000. These intangibles are determined to have limited lives, amortized on a straight-line basis over five years. It is now December 31, 2020, and Sun City reports net income of $10,000,000. Required a. Calculate the amount of goodwill originally reported for this acquisition, and its allocation to the controlling and noncontrolling interests. Enter answers in thousands (example, $41,750,000 equals $41,750 in thousands). Total goodwill Allocation to controlling interests $ Allocation to noncontrolling interests $ b. Calculate equity in net income and the noncontrolling interest in net income for 2020, assuming goodwill from this acquisition is impaired by $2,000,000 in 2020. • Enter answers in thousands (example, $3,000,000 equals $3,000 in thousands). • Use negative signs with answers that reduce net income amounts. Noncontrolling Equity in NI Interest in NI Total Sun City's reported net income $ Revaluation write-offs: Identifiable intangibles Goodwill impairment loss 2$ $ %24 %24 Palm Resorts acquired its 70 percent interest in Sun City on January 1, 2017, for $41,750,000. The fair value of the 30 percent noncontrolling interest at the date of acquisition was $14,750,000. Sun City's date-of-acquisition reported net assets of $5,000,000 were carried at amounts approximating fair value, but it had unrecorded identifiable intangibles, capitalizable per ASC Topic 805, valued at $7,500,000. These intangibles are determined to have limited lives, amortized on a straight-line basis over five years. It is now December 31, 2020, and Sun City reports net income of $10,000,000. Required a. Calculate the amount of goodwill originally reported for this acquisition, and its allocation to the controlling and noncontrolling interests. Enter answers in thousands (example, $41,750,000 equals $41,750 in thousands). Total goodwill Allocation to controlling interests $ Allocation to noncontrolling interests $ b. Calculate equity in net income and the noncontrolling interest in net income for 2020, assuming goodwill from this acquisition is impaired by $2,000,000 in 2020. • Enter answers in thousands (example, $3,000,000 equals $3,000 in thousands). • Use negative signs with answers that reduce net income amounts. Noncontrolling Equity in NI Interest in NI Total Sun City's reported net income $ Revaluation write-offs: Identifiable intangibles Goodwill impairment loss 2$ $ %24 %24
Expert Answer:
Answer rating: 100% (QA)
Answers Calculate the amount of goodwill as follows Acquisition Cost Fair Valu... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
Posted Date:
Students also viewed these accounting questions
-
What is 2014 equity in net income of Salem, reported on Portland's books using the complete equity method? a. $ 400,000 b. $ 900,000 c. $1,200,000 d. $2,500,000 Use the following information to...
-
Controlling share of consolidated net income is a measurement of income to the stockholders of the parent, but does a change in cash as reflected in a statement of cash flows also relate to other...
-
In its 20X7 consolidated income statement , Bower Development Company reported consolidated net income of $961,000 and $39,000 of income assigned to the 30 percent noncontrolling interest in its only...
-
(SI Units) In a tensile test, the starting gage length = 100.0mm and the cross-sectional area = 150 mm2. During testing, thefollowing force and gage length data are collected: (1) 17,790 N at100.2...
-
Explain the difference between a vision and a mission.
-
Find the approximations to within 104 to all the real zeros of the following polynomials using Newton's method. a. f (x) = x3 2x2 5 b. f (x) = x3 + 3x2 1 c. f (x) = x3 x 1 d. f (x) = x4 + 2x2 x...
-
The timber column has a length of \(18 \mathrm{ft}\) and is fixed connected at its ends. Use the NFPA formulas to determine the largest axial force \(P\) that it can support. 6 in. P -5 in. P 18 ft
-
ROI, RI, EVA and Performance Evaluation. Eva Manufacturing makes fashion products and competes on the basis of quality and leading-edge designs. The company has $3,000,000 invested in assets in its...
-
Give specific examples of how a restaurant, hotel, or nightclub use price discrimination? Do you think they are effective or not?
-
Provide an example, with rationale, of an area in your personal life where you would like to apply time value of money concepts. What can you do to create a more financially sound future for yourself?
-
24. If the capital beginning is P14,000, investment during the year is P23,000, net loss is P19,200 and the capital ending is P16,000. How much is the withdrawal during the year? 25. If the capital...
-
Now suppose Natsam Corporation has \($275\) million of excess cash. The firm has no debt and 500 million shares outstanding with a current market price of \($19\) per share. The board decided to do...
-
Indell stock has a current market value of \($170\) million and a beta of 1.80. Indell currently has risk-free debt as well. The firm decides to change its capital structure by issuing \($35.96\)...
-
You have \($175,000\) to invest. You choose to put \($225,000\) into the market by borrowing \($50,000. a. If the risk-free interest rate is 6% and the market expected return is 7%, what is the...
-
You have \($9800\) to invest. You decide to invest \($19,000\) in Google and short sell \($9200\) worth of Yahoo! Googles expected return is 14% with a volatility of 27% and Yahoo!s expected return...
-
Harrison Holdings, Inc. (HHI) is publicly traded, with a current share price of \($30\) per share. HHI has 23 million shares outstanding, as well as \($70\) million in debt. The founder of HHI, Harry...
-
Share whether you think an individual has to be a strong leader in order to be an effective manager. Explain why or why not, with reference to the articles above to support your position. Further...
-
Use the following data to answer the next two (2) questions: Product 1 Product 2 Product 3 Direct Material Cost $25,000 $30,000 $35,000 Direct Labor Cost $30,000 $40,000 $50,000 Direct Labor Hours...
-
At the beginning of 2009, a subsidiary sold equipment, carried on its books at $3,000,000, net, to its parent for $5,000,000. The equipment had a remaining life of 20 years and straight-line...
-
The Town of Amherst, NY finances its operations from revenues collected from property taxes, waste management fees, municipal court fines, and interest on investments. Amherst maintains only a...
-
On January l, 2014, the Phillips Company acquired all of the outstanding shares of Standard, Ltd., a U.K. firm, for 8,000,000 in cash. At the end of 2014, the two companies presented the condensed...
-
The City of Central Falls has engaged Robert Cohen, CPA to audit the June 30, 1999 financial statements of the City's Water Department under the GAO's Government Auditing Standards. Cohen's report...
-
Wil Stevens is executive vice president of a major automobile manufacturing company. Stevens was recently elected Mayor of Detroit. Prior to assuming office, he calls on you, his independent auditor,...
-
A public accounting firm has been engaged to perform the audit of a local, federally funded Housing Allowance Program. The objective of the program is to increase the housing standards of Agana...
Study smarter with the SolutionInn App