On January 1, 2021, Ackerman Company acquires 80% of Seidel Company for $1,746,240 in cash. The remaining 20 percent of the non-controlling interest shares had an estimated fair value at the acquisition date of $436,560. Seidel's total book value at the acquisition date was $1,734,000.

The fair value of Seidel's recorded assets and liabilities was equal to their book value. However, Seidel had two unregistered assets: a trademark with an indefinite life and an estimated fair value of $249,900 and various customer relationships estimated at $183,600 with a remaining life of four years. Any remaining acquisition-date fair value in the Seidel acquisition was considered goodwill.

During 2021, Seidel reported net income of $175,440 and declared and paid dividends totaling $51,000. Also in 2021, Ackerman reported net income of $357,000, but did not declare or pay dividends.

1. What amount should Ackerman allocate to Seidel's 20 percent non-controlling interest on the acquisition date?

2. How much of 2021 consolidated net income should be allocated to non-controlling interest?

3. How much of the 2021 dividend should be allocated to the non-controlling interest?

4. What amount of non-controlling interest should appear in the owners' equity section of Ackerman's consolidated balance sheet as of December 31, 2021?

Answer rating: 100% (QA)

On the acquisition date Ackerman should allocate the fair value of Seidels net identifiable assets t... View the full answer