Patterson Company acquired an 80 interest in Granny Company on January 1, 2021 in exchange for...

 

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Patterson Company acquired an 80 interest in Granny Company on January 1, 2021 in exchange for various considerations totaling $720,000. At the acquisition date, the fair value of the noncontrolling interest was $180,000 Granny's book valoe of net assets on that date consisted of common stock of $390,000 and retained earnings of $410,000. Patterson attributed the excess of fair value over Granny's book value to undervalued equipment with a 10-year remaining life. Reported net income for 2021 was $250,000 for Patterson and $100,000 for Granny. Patterson distributed $80,000 in dividends during 2021%3; Granny paid $30,000. Granny regularly sells inventory to Patterson at a 20 percent gross profit rate. Patterson consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the two years after this business combination were the following: Transfer Inventory Remaining at Year- Year Price End (at transfer price) 2021 $80,000 $15,000 2022 $90,000 $25,000 The following selected account balances are from the individual financial records of these two companies as of December 31, 2022 Patterson Granny Sales $900,000 $600,000 540,000 360,000 Operating Expenses 100,000 50,000 COGS Dividend Paid 90,000 20,000 Inventory 240,000 120,000 Equipment (net) 400,000 150,000 Answer the following questions: (Do not add dollar sign; do not add comma to your amount; round the answer to the whole number) 1. What is the amount of Equity in Granny Eanings for year 2022? 2. What is the amount of noncontrolling interest net income for 2022? 3. What was the balance of Investment in Granny on Patterson's book as of December 31, 2021? 4. Determine the consolidated balance of sales for 2022. 5. Determine the consolidated balance of cost of goods sold for 2022. 6. Determine the consolidated balance of operating expenses for 2022. 7. Determine the consolidated balance of inventory as of December 31, 2022. 8. Determine the consolidated balance of equipment as of December 31, 2022. Patterson Company acquired an 80 interest in Granny Company on January 1, 2021 in exchange for various considerations totaling $720,000. At the acquisition date, the fair value of the noncontrolling interest was $180,000 Granny's book valoe of net assets on that date consisted of common stock of $390,000 and retained earnings of $410,000. Patterson attributed the excess of fair value over Granny's book value to undervalued equipment with a 10-year remaining life. Reported net income for 2021 was $250,000 for Patterson and $100,000 for Granny. Patterson distributed $80,000 in dividends during 2021%3; Granny paid $30,000. Granny regularly sells inventory to Patterson at a 20 percent gross profit rate. Patterson consistently resold this merchandise in the year of acquisition or in the period immediately following. Transfers for the two years after this business combination were the following: Transfer Inventory Remaining at Year- Year Price End (at transfer price) 2021 $80,000 $15,000 2022 $90,000 $25,000 The following selected account balances are from the individual financial records of these two companies as of December 31, 2022 Patterson Granny Sales $900,000 $600,000 540,000 360,000 Operating Expenses 100,000 50,000 COGS Dividend Paid 90,000 20,000 Inventory 240,000 120,000 Equipment (net) 400,000 150,000 Answer the following questions: (Do not add dollar sign; do not add comma to your amount; round the answer to the whole number) 1. What is the amount of Equity in Granny Eanings for year 2022? 2. What is the amount of noncontrolling interest net income for 2022? 3. What was the balance of Investment in Granny on Patterson's book as of December 31, 2021? 4. Determine the consolidated balance of sales for 2022. 5. Determine the consolidated balance of cost of goods sold for 2022. 6. Determine the consolidated balance of operating expenses for 2022. 7. Determine the consolidated balance of inventory as of December 31, 2022. 8. Determine the consolidated balance of equipment as of December 31, 2022.

Answer rating: 100% (QA)

Purchase consideration 720000 Fair value of the noncontrolling interest 180000 Fair value of Granny at the acquisition date 900000 Less Grannys book v... View the full answer