Net income from Maggie = 61,000

--Calculate goodwill for the parent and the NC

---Investment account at year-end 12/31/2021

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Maggie Company On January 1, 2021, Simpsons purchased 10% of the outstanding voting shares of Maggie for $20,000. Also on this date, Maggie secured a bank loan for $600,000. In order to secure this financing, Simpsons guaranteed the loan in the event Maggie is unable to make payments. In exchange for this guarantee, Maggie agreed to the following: Simpsons has decision-making power over Maggie's operating and financing activities An annual management fee equal to 8% of Maggie's sales is to be paid to Simpsons. Based on the loan agreement, as well as the simple fact that Company CEO Maggie is not yet able to speak, it was determined that Simpsons was the primary beneficiary of Maggie. On January 1, 2021, Maggie had total equity of $50,000 and a fair value of $200,000. The difference of $150,000 is allocated entirely to a patent that has a remaining useful life of 10 years. The trial balance for Maggie is available in the excel file. Of particular note: 1. Maggie paid $10,000 in dividends 2. A management fee of $64,000 was paid by Maggie to Simpsons. This fee was recorded by Maggie as an operating expense. Maggie Company On January 1, 2021, Simpsons purchased 10% of the outstanding voting shares of Maggie for $20,000. Also on this date, Maggie secured a bank loan for $600,000. In order to secure this financing, Simpsons guaranteed the loan in the event Maggie is unable to make payments. In exchange for this guarantee, Maggie agreed to the following: Simpsons has decision-making power over Maggie's operating and financing activities An annual management fee equal to 8% of Maggie's sales is to be paid to Simpsons. Based on the loan agreement, as well as the simple fact that Company CEO Maggie is not yet able to speak, it was determined that Simpsons was the primary beneficiary of Maggie. On January 1, 2021, Maggie had total equity of $50,000 and a fair value of $200,000. The difference of $150,000 is allocated entirely to a patent that has a remaining useful life of 10 years. The trial balance for Maggie is available in the excel file. Of particular note: 1. Maggie paid $10,000 in dividends 2. A management fee of $64,000 was paid by Maggie to Simpsons. This fee was recorded by Maggie as an operating expense.

Answer rating: 100% (QA)

To calculate the goodwill for the parent Simpsons and the noncontrolling interest NC in Maggie as of ... View the full answer