On December 31, 2018, Panorama Incorporated purchased 60% of Sky Manufacturing for $300,000. The book value and fair value of Sky's assets and liabilities were equal with the exception of plant assets which were undervalued by $60,000 and had a remaining life of 10 years, and a patent which was undervalued by $40,000 and had a remaining life of 5 years. At December 31, 2020, the companies showed the following balances on their respective adjusted trial balances:

Panorama Sky Sky

Book Value Book Value Fair Value

Assets (includes

Investment in Sky) $950,000 $300,000 $320,000

Plant assets - net 590,000 150,000 150,000

Patent 310,000 200,000 280,000

Expenses 800,000 300,000

Liabilities $480,000 $120,000 $120,000

Common Stock 300,000 100,000

Retained Earnings 890,000 330,000

Revenue 980,000 400,000

Required:

a)Calculate the balance in the Plant assets - net and the Patent accounts on the consolidated balance sheet as of December 31, 2020.

b) Calculate consolidated net income for 2020, and the amount allocated to the controlling and noncontrolling interests.

c) Calculate the balance of the noncontrolling interest in Sky to be reported on the consolidated balance sheet at December 31, 2020.

Answer rating: 100% (QA)

Data Page 1 Balance in the plant asset Patent accounts Plant Patent Asset A CCOunt ... View the full answer