On January 1, 2018, Pen Corporation acquired 75% of the outstanding common stock of Sen Company...
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On January 1, 2018, Pen Corporation acquired 75% of the outstanding common stock of Sen Company for $450,000. Fair value of noncontrolling interest at the date of acquisition is $116,500. Sen's stockholders' equity on January 1, 2018, was as follows: Common stock, $20 par Additional paid-in capital Retained earnings Accumulated OCI $200,000 100,000 100,000 25,000 Differences between book value and fair value of the identifiable net assets of Sen Company on January 1, 2018, were limited to the following: Inventories (FIFO) Building (net) (remaining life 10 years) Book value $ 40,000 180,000 Fair value $ 45,000 150,000 Both Pen and Sen used the straight-line method for depreciation. Goodwill was unimpaired as of December 31, 2018. However, a goodwill impairment of $20,000 was realized in 2019. For the two fiscal years ended December 31, 2019, Sen had net income and dividends (declared and paid on December 28 each year) as follows: Net income Dividends Other Comprehensive Income (Loss) $ 80,000 120,000 $40,000 70,000 2018 8,000 (10,000) 2019 (ii) Calculate equity in net income of Sen attributable to controlling and noncontrolling interest in 2018. On January 1, 2018, Pen Corporation acquired 75% of the outstanding common stock of Sen Company for $450,000. Fair value of noncontrolling interest at the date of acquisition is $116,500. Sen's stockholders' equity on January 1, 2018, was as follows: Common stock, $20 par Additional paid-in capital Retained earnings Accumulated OCI $200,000 100,000 100,000 25,000 Differences between book value and fair value of the identifiable net assets of Sen Company on January 1, 2018, were limited to the following: Inventories (FIFO) Building (net) (remaining life 10 years) Book value $ 40,000 180,000 Fair value $ 45,000 150,000 Both Pen and Sen used the straight-line method for depreciation. Goodwill was unimpaired as of December 31, 2018. However, a goodwill impairment of $20,000 was realized in 2019. For the two fiscal years ended December 31, 2019, Sen had net income and dividends (declared and paid on December 28 each year) as follows: Net income Dividends Other Comprehensive Income (Loss) $ 80,000 120,000 $40,000 70,000 2018 8,000 (10,000) 2019 (ii) Calculate equity in net income of Sen attributable to controlling and noncontrolling interest in 2018.
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Related Book For
Intermediate Accounting
ISBN: 978-0078025839
9th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson , Wayne Thomas
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