Paymore Shoes acquired 80 percent of the voting stock of Spire Footwear on Feb ruary 1,...

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Paymore Shoes acquired 80 percent of the voting stock of Spire Footwear on Feb ruary 1, 2017, for $21 million. The fair value of the noncontrolling interest at the acquisition date wae $3 million. The excess of Spire's fair value over its $4 million book value was attributed to limited-life identifiable intangible assets ($5 million, 5-year life) and goodwill. Paymore's fiscal year ends January 31. As of February 1, 2020, the goodwill and identifiable intangibles are not impaired. There is no im- pairment of either intangible in fiscal 2021. Spire transfers merchandise to Paymore on a regular basis, at a markup of 25% on cost. Following is information on intercompany merchandise transactions for fiscal 2021: • Balance in Paymore's beginning inventory, purchased from Spire, $1,000,000. • Balance in Paymore's ending inventory, purchased from Spire, $750,000. • Total sales from Spire to Paymore, at the price charged to Paymore, S25 million. Paymore uses the complete equity method to account for its investment in Spire on its own books. The separate trial balances for Paymore and Spire at January 31, 2021, are below. Paymore Dr (Cr) Spire Dr (Cr) (in thousands) Current assets Plant and equipment, net. Intangibles Investment in Spire. Liabilities.. Capital stock Retained earnings, beginning. Sales revenue.. Equity in net income. Cost of sales.... Operating expenses 2$ 4,500 $ 750,000 10,000 1,200,000 101,360 22,080 (945,000) (28,000) (340,000) (1,200,000) (440) 980,000 200,000 (745,000 (3,000) (5,000) (300,000 200,000 98,500 Total Required a. Calculate the allocation of goodwill between controlling and noncontrolling interests. b. Calculate equity in net income, appearing on Paymore's separate books ($440,000), and the nono trolling interest in net income for fiscal 2021. c. Prepare a working paper to consolidate the January 31, 2021, trial balances of Paymore and Spa Label your eliminating entries (C).(1). (E). (R). (O), and (N). Paymore Shoes acquired 80 percent of the voting stock of Spire Footwear on Feb ruary 1, 2017, for $21 million. The fair value of the noncontrolling interest at the acquisition date wae $3 million. The excess of Spire's fair value over its $4 million book value was attributed to limited-life identifiable intangible assets ($5 million, 5-year life) and goodwill. Paymore's fiscal year ends January 31. As of February 1, 2020, the goodwill and identifiable intangibles are not impaired. There is no im- pairment of either intangible in fiscal 2021. Spire transfers merchandise to Paymore on a regular basis, at a markup of 25% on cost. Following is information on intercompany merchandise transactions for fiscal 2021: • Balance in Paymore's beginning inventory, purchased from Spire, $1,000,000. • Balance in Paymore's ending inventory, purchased from Spire, $750,000. • Total sales from Spire to Paymore, at the price charged to Paymore, S25 million. Paymore uses the complete equity method to account for its investment in Spire on its own books. The separate trial balances for Paymore and Spire at January 31, 2021, are below. Paymore Dr (Cr) Spire Dr (Cr) (in thousands) Current assets Plant and equipment, net. Intangibles Investment in Spire. Liabilities.. Capital stock Retained earnings, beginning. Sales revenue.. Equity in net income. Cost of sales.... Operating expenses 2$ 4,500 $ 750,000 10,000 1,200,000 101,360 22,080 (945,000) (28,000) (340,000) (1,200,000) (440) 980,000 200,000 (745,000 (3,000) (5,000) (300,000 200,000 98,500 Total Required a. Calculate the allocation of goodwill between controlling and noncontrolling interests. b. Calculate equity in net income, appearing on Paymore's separate books ($440,000), and the nono trolling interest in net income for fiscal 2021. c. Prepare a working paper to consolidate the January 31, 2021, trial balances of Paymore and Spa Label your eliminating entries (C).(1). (E). (R). (O), and (N).