Consolidation Eliminating Entries, Date of Acquisition and Two Years Later Plaza Hotels acquired a 90 percent...

  

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Consolidation Eliminating Entries, Date of Acquisition and Two Years Later Plaza Hotels acquired a 90 percent interest in Stardust Casinos on January 1, 2020 for $51,100,000. The fair value of the 10 percent noncontrolling interest at the date of acquisition was $2,900,000. Stardust's date-of- acquisition reported net assets were carried at amounts approximating fair value, except for these items: E5.3 LO 1, 2 • Plant and equipment, 10-year life, straight-line, is overvalued by $6,000,000. • Previously unrecorded limited-life identifiable intangibles, 4-year life, straight-line, were valued at $8,000,000. Stardust's equity accounts at the date of acquisition were as follows: $ 300,000 Capital stock Retained earnings .. Accumulated other comprehensive income.. 1,650,000 50,000 $2,000,000 Total Stardust reports net income of $4,000,000 and other comprehensive loss of $10,000 for 2021. Stardust reported net income of $2,800,000 and other comprehensive income of $25,000 in 2020. Stardust did not declare any dividends in either year. Goodwill from this acquisition is impaired by $200,000 during 2021, but was not impaired in 2020. Required Calculate the original goodwill for this acquisition and its allocation to controlling and noncontrol- ling interests. In what ratio is goodwill allocated between controlling and noncontrolling interests? b. а. Prepare the consolidation eliminating entries (E) and (R) at the date of acquisition. Prepare the consolidation eliminating entries (C), (E), (R), (O) and (N) at December 31, 2021. с. Consolidation Eliminating Entries, Date of Acquisition and Two Years Later Plaza Hotels acquired a 90 percent interest in Stardust Casinos on January 1, 2020 for $51,100,000. The fair value of the 10 percent noncontrolling interest at the date of acquisition was $2,900,000. Stardust's date-of- acquisition reported net assets were carried at amounts approximating fair value, except for these items: E5.3 LO 1, 2 • Plant and equipment, 10-year life, straight-line, is overvalued by $6,000,000. • Previously unrecorded limited-life identifiable intangibles, 4-year life, straight-line, were valued at $8,000,000. Stardust's equity accounts at the date of acquisition were as follows: $ 300,000 Capital stock Retained earnings .. Accumulated other comprehensive income.. 1,650,000 50,000 $2,000,000 Total Stardust reports net income of $4,000,000 and other comprehensive loss of $10,000 for 2021. Stardust reported net income of $2,800,000 and other comprehensive income of $25,000 in 2020. Stardust did not declare any dividends in either year. Goodwill from this acquisition is impaired by $200,000 during 2021, but was not impaired in 2020. Required Calculate the original goodwill for this acquisition and its allocation to controlling and noncontrol- ling interests. In what ratio is goodwill allocated between controlling and noncontrolling interests? b. а. Prepare the consolidation eliminating entries (E) and (R) at the date of acquisition. Prepare the consolidation eliminating entries (C), (E), (R), (O) and (N) at December 31, 2021. с.