On January 1, 2019, Pride Corporation purchased 90 percent of the outstanding voting shares of Star,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
On January 1, 2019, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc., for $612,000 cash. The acquisition-date fair value of the noncontrolling interest was $68,000. At January 1, 2019, Star's net assets had a total carrying amount of $476,000. Equipment (eight-year remaining life) was undervalued on Star's financial records by $55,200. Any remaining excess fair value over book value was attributed to a customer list developed by Star (four-year remaining life), but not recorded on its books. Star recorded net income of $48,300 in 2019 and $55,200 in 2020. Each year since the acquisition, Star has declared a $13,800 dividend. At January 1, 2021, Pride's retained earnings show a $172,500 balance. Selected account balances for the two companies from their separate operations were as follows: 2021 Revenues 2021 Expenses Star Pride $343,700 $ 196,800 241,800 134,700 What is consolidated net income for 2021? Assuming that Pride, in its internal records, accounts for its investment in Star using the equity method, what amount of retained earnings would Pride report on its January 1, 2021, consolidated balance sheet? On January 1, 2019, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc., for $612,000 cash. The acquisition-date fair value of the noncontrolling interest was $68,000. At January 1, 2019, Star's net assets had a total carrying amount of $476,000. Equipment (eight-year remaining life) was undervalued on Star's financial records by $55,200. Any remaining excess fair value over book value was attributed to a customer list developed by Star (four-year remaining life), but not recorded on its books. Star recorded net income of $48,300 in 2019 and $55,200 in 2020. Each year since the acquisition, Star has declared a $13,800 dividend. At January 1, 2021, Pride's retained earnings show a $172,500 balance. Selected account balances for the two companies from their separate operations were as follows: 2021 Revenues 2021 Expenses Star Pride $343,700 $ 196,800 241,800 134,700 What is consolidated net income for 2021? Assuming that Pride, in its internal records, accounts for its investment in Star using the equity method, what amount of retained earnings would Pride report on its January 1, 2021, consolidated balance sheet?
Expert Answer:
Answer rating: 100% (QA)
A To calculate the consolidated net income for 2021 we first need to determine the income of Pride and Star separately From the selected account balan... View the full answer
Related Book For
Fundamentals Of Advanced Accounting
ISBN: 9781266268533
9th International Edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date:
Students also viewed these accounting questions
-
Assuming that Pride, in its internal records, accounts for its investment in Star using the equity method, what amount of retained earnings would Pride report on its January 1, 2021, consolidated...
-
What is consolidated net income for 2021? a. $194,000 b. $197,500 c. $203,000 d. $238,000 On January 1, 2019, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc.,...
-
On January 1, 2022, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc., for $540,000 cash. The acquisition-date fair value of the noncontrolling interest was...
-
Marketing efforts to produce, promote, and reclaim environmentally sensitive products are called ________________ .
-
Consider the opening photograph for Part 3 on page 578. Discuss the roles of conduction, convection, and radiation in the operation of the cooling fins on the support posts of the Alaskan oil...
-
The cycle in Figure represents the operation of a gasoline internal combustion engine. Volume V3 = 4.00V1. Assume the gasoline - air intake mixture is an ideal gas with = 1.30 what are the ratios...
-
Assume HPC, Inc., began December with 60 units of inventory that cost a total of $720. During December, HPC, Inc., purchased and sold goods as follows: HPC, Inc., uses perpetual inventory. Under the...
-
Find the present value of $500 due in the future under each of these conditions: a. 12% nominal rate, semiannual compounding, discounted back 5 years b. 12% nominal rate, quarterly compounding,...
-
What factors influence the attitude-behavior relationship/correlation? How do each of these factors affect the strength of the attitude-behavior relationship?
-
In the investment world, commodities are typically pretty boring. From livestock to grains to steel and other metals, commodities have their ups and downs. But long term, the world will always need...
-
Find the volume of solid of revolution. about y, a? + 4y? = 4 and the coordinate axes in quadrant 1 x? + 4y - 4
-
(a) Estimate a two-variable regression model for both subsamples and report the estimated results. (10) (b) Interpret the estimated values of Beta in each sample. Why do you think that that the...
-
In the Diamond Energy Resources case study, what suggestions can you give to conduct a sensitivity analysis of the investment ?
-
Q1a). Which credit card best meets your needs? How does it compare to your current credit card? If it is better than your current credit card would you consider switching cards? Explain. Do you think...
-
What are some examples of alternative marketing? What are the advantages of this type of marketing? What are some disadvantages?
-
In your business, assets, and liabilities have historically varied with sales. Assets are usually 80percent of sales, and liabilities are usually 53percent of sales.Your sales next year will be...
-
On December 31, Ferndale Enterprises has an $800 debit balance in Allowance for Uncollectible Accounts. If an accounts receivable aging method analysis indicated that an estimated $6,400 of December...
-
we have to compute the letter grades for a course. The data is a collection of student records stored in a file. Each record consists of a name(up to 20 characters), ID (8 characters), the scores of...
-
At year-end, the Queen City partnership has the following capital balances: Profits and losses are split on a 3:3:2:2 basis, respectively. Elizabeth decides to leave the partnership and is paid...
-
On January 1, 2022, Aronsen Company acquired 90 percent of Siedel Companys outstanding shares. Siedel had a net book value on that date of $480,000: common stock ($10 par value) of $200,000 and...
-
On July 1, 2024, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $720,000 in cash and equity securities. The remaining 30 percent of Atlantas shares...
-
Fill in the Blank. The \(\overline{\text { modal analysis basically }}\) _________ the equations of motion.
-
Fill in the Blank. The representation of an arbitrary \(n\)-dimensional vector as a linear combination of \(n\)-linearly independent vectors is known as _________ theorem.
-
Fill in the Blank. The _________ analysis is based on the expansion theorem.
Study smarter with the SolutionInn App