Nascent, Inc., acquires 60 percent of Sea-Breeze Corporation for $414,000 cash on January 1, 2021. The remaining
Question:
Nascent, Inc., acquires 60 percent of Sea-Breeze Corporation for $414,000 cash on January 1, 2021. The remaining 40 percent of the Sea-Breeze shares traded near a total value of $276,000 both before and after the acquisition date. On January 1, 2021, Sea-Breeze had the following assets and liabilities:
The companies’ financial statements for the year ending December 31, 2024, follow:
Answer the following questions:a. What account balances reveal that the parent has applied the initial value method?b. What is the annual excess amortization initially recognized in connection with this acquisition?c. If the parent had applied the equity method, what investment income would the parent have recorded in 2024?d. What amount should the parent report as retained earnings in its January 1, 2024, consolidated balance sheet?e. What is consolidated net income for 2024, and what amounts are attributable to the controlling and noncontrolling interests?f. Within consolidated statements at January 1, 2021, what balance is included for the subsidiary’s Buildings account?g. What is the consolidated Buildings reported balance as of December 31, 2024?
Step by Step Answer:
Fundamentals Of Advanced Accounting
ISBN: 9781266268533
9th International Edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik