Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200 Assume that a parent company acquired 80% of the outstanding voting common stock of a subsidiary on January 1, 2012. On the acquisition date, the identifiable net assets of the subsidiary had fair values that approximated their recorded book values except for a patent, which had a fair value of $100,000 and no recorded book value. On the date of acquisition, the patent had 5 years of remaining useful life and the parent company amortizes its intangible assets using straight line amortization. During the year ended December 31, 2013, the subsidiary recorded sales to the parent in the amount of $105,000. On these sales, the subsidiary recorded pre-consolidation gross profits equal to 25%. Approximately 30% of this merchandise remains in the parent's inventory at December 31, 2013. The following summarized pre-consolidation financial statements are for the parent and the subsidiary for the year ended December 31, 2013: Investor Investee Income statement: Revenues $2,400,000 $321,000 Equity income 106,500 Expenses (1,600,000) (160,000) Net income $906,500 $161,000 Retained earnings statement: BOY retained earnings $752,000 $40,000 Net income 906,500 161,000 Dividends declared (64,000) (40,000) EOY retained earnings $1,594,500 $161,000 Balance sheet: Current assets $800,000 $101,000 Equity investment 234,500 Noncurrent assets 4,000,000 300,000 Total assets $5,034,500 $401,000 Liabilities $2,640,000 $160,000 Common stock & APIC 800,000 80,000 Retained earnings 1,594,500 161,000 Total liabilities & stockholders' equity $5,034,500 $401,000 Based on this information, determine the balance for Consolidated net income attributable to noncontrolling interest: O$28,200 O$26,625 O$30,625 O$32,200
Expert Answer:
Answer rating: 100% (QA)
Stepbystep explanation Value of patent in the consolidated financial statements on December 31 2013 ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Assume that a parent company acquired a subsidiary on January 1, 2013. The purchase price was $500,000 million in excess of the subsidiary's book value of Stockholders' Equity on the acquisition...
-
Assume a parent company acquires 80% of the outstanding voting common stock of a subsidiary on January 1, 2018. One the acquisition date, the identifiable net assets of the subsidiary had fair value...
-
The Pizza Company acquired 90% of the outstanding voting common stock of the Salsa Company on June 30, 2017. The Pizza Company had effective control over the Salsa Company, however, the Pizza Company...
-
Nevada Department Stores is planning to sell its Spring Valley. Fernley, and Winchester stores. The firm expects to sell each of the three stores for the same, positive cash flow of SD. The firm...
-
Draw a profit or loss graph (similar to figure) for a put contract with an exercise price of $45 for which a $5 premium is paid. You may assume that the option is being evaluated on its expiration...
-
(e) Use Lagrange multipliers to find the maximum value of (f) z = x + 4xy subject to the constraint x + 3y = 5 A profit-maximising firm has a marginal cost function and a marginal revenue function...
-
What is the difference between the finite element method and the Rayleigh-Ritz method?
-
Portofino Company made purchases on account from three foreign suppliers on December 15, 2012, with payment made on January 15, 2013. Information related to these purchases is as follows: Portofino...
-
Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An...
-
You are reviewing audit work papers containing a narrative description of the Tenney Corporations factory payroll sys-tem. A portion of the narrative is as follows: Factory employees punch time clock...
-
You purchase a small single-collector mass spectrometer on e-bay with Nier-type geometry (r = 15.24 cm). You take it home, plug it in and run up a magnetic field of 650 gauss. Now you want to focus...
-
In the binomial model with So=3,u= d = and r = consider a European call option with strike price K = , expiring at time 3. (a) is the no-arbitrage condition satisfied for this model? Why? (b) What...
-
(b) XYZ Auto Ltd. is in the business of selling cars. It also sells insurance and finance as part of its overall business strategy. The following information is available for the company. Physical...
-
Floating Speed Boat has completed its journal entries for the month of June and posted them to the general ledger. Based on the ledger balances, an adjusted trial balance has been prepared. The...
-
Required: 1) Enter the opening balances from the August 2021 balance sheet into the general ledger accounts. Prepare journal entries for the month of September and post them to the appropriate...
-
Marginal costing base: Revenue-variable cost (manufacturing and non-manufacturing)=contribution-fixed cost=operating profit:
-
Banana Computer Co. plans to launch its latest consumer electronic device, the iPeel, early next year. Based on market research, it estimates that the market potential for the iPeel is 170,000 units,...
-
a. What is the cost of borrowing if Amarjit borrows $28 500 and repays it over a four-year period? b. How many shares of each stock would he get if he used the $28 500 and invested equally in all...
-
According to the acquisition method of accounting for business combinations, costs paid to attorneys and accountants for services in arranging a merger should be: a. Capitalized as pan of the overall...
-
Redfield Company reports current earnings of $420,000 while declaring $52,000 in cash dividends. Snedeker Company earns $147,000 in net income and declares $13,000 in dividends. Redfield has held a...
-
In computing the noncontrolling interests share of consolidated net income, how should the subsidiarys net income be adjusted for intra-entity transfers? a. The subsidiarys reported net income is...
-
Two projects of equal value have been evaluated using a multifactor productivity measure that combined labor-hours at \($30\) per hour and overhead expense calculated as 20% of labor expense for the...
-
One road-paving crew of six people worked 8 hours to pave 25 miles of two-lane road, while a smaller crew of four people worked 12 hours to pave 15 miles of four- lane road. Which crew was more...
-
The Bankston fulfilment center of Universal Logistics is a large warehouse that packs and ships customer orders from client on-line retailers. Five employees have been nominated for a productivity...
Study smarter with the SolutionInn App