Carson, Inc., acquires 80 percent of the outstaniding common stock of Gardena corporation on January 1, 2020, in exchange for $900,000 cash. At the acquisition date, Gardena's total fair value, including the noncontrolling interest, was assessed at $1,125,000. Also at the acquisition date, Gardena's book value was $690,000. Several individual items on Gardena's financial records had fair values that differed from their book values as follows: Book value Fair value Trademark (indefinite life) $360,000 $383,000 Property and equipment (net, 8-year remaining useful life) 290,000 330,000 Patent (14-year remaining useful life) 132,000 272,000 For internal reporting purposes, Carson, inc., employs the equity method to account for this investment. The following account balances are for the year ending December 31, 2020, for both companies. At year-end, there were no intra-entity receivables or payables. CarsonGardena Revenues ($1,400,000)($825,000) Cost of goods sold 774,000395,750 Depreciation expense 328,00036,250 Amortization expense 028,000 Equity in income of Gardena ($280,000)0 Net income ($578,000)($365,000) Retained earnings (1/1/2020) ($1,275,000)($530,000) Net income ($578,000)($365,000) Dividends declared 300,00050,000 Retained earnings (12/31/2020) ($1,553,000)($845,000) Current assets $860,000$432,250 Investment in Gardena 1,140,0000 Trademark 240,000360,000 Property and equipment (net) 1,030,000253,750 Patents 0104,000 Total assets 3,270,0001,150,000 Accounts payable ($142,000)($145,000) Common stock ($300,000)($120,000) Additional paid-in capital ($1,275,000)($40,000) Retained earnings (12/31/2020) ($1,553,000)($845,000) Total liabilities and equities ($3,270,000)($1,150,000) 1. What is the total fair value of Gardena ? Hint:Included in the question Your answer : 2. What is the goodwill of Gardena at acquisition? Your answer: 3.What is the amount of Non-Controlling Interest at acquisition (1/1/2020)? Your answer: 4. The working paper entry to eliminate any dividend earned from Gardena Corporation during 2020 (consolidation JE D) Your answer:

Question

Carson, Inc., acquires 80 percent of the outstaniding common stock of Gardena corporation on January 1, 2020, in exchange for $900,000 cash.   At the acquisition date, Gardena's total fair value, including the noncontrolling interest, was assessed at $1,125,000. Also at the acquisition date,   Gardena's book value was $690,000.           Several individual items on Gardena's financial records had fair values that differed from their book values as follows:             Book value Fair value    Trademark (indefinite life)     $360,000 $383,000    Property and equipment (net, 8-year remaining useful life)   290,000 330,000    Patent (14-year remaining useful life)    132,000 272,000                   For internal reporting purposes, Carson, inc., employs the equity method to account for this investment. The following account balances are for the year  ending December 31, 2020, for both companies. At year-end, there were no intra-entity receivables or payables.                            CarsonGardena     Revenues       ($1,400,000)($825,000)     Cost of goods sold      774,000395,750     Depreciation expense      328,00036,250     Amortization expense      028,000     Equity in income of Gardena     ($280,000)0     Net income      ($578,000)($365,000)                    Retained earnings (1/1/2020)     ($1,275,000)($530,000)     Net income      ($578,000)($365,000)     Dividends declared       300,00050,000     Retained earnings (12/31/2020)     ($1,553,000)($845,000)                    Current assets      $860,000$432,250     Investment in Gardena     1,140,0000     Trademark       240,000360,000     Property and equipment (net)     1,030,000253,750     Patents       0104,000     Total assets      3,270,0001,150,000     Accounts payable      ($142,000)($145,000)     Common stock      ($300,000)($120,000)     Additional paid-in capital     ($1,275,000)($40,000)     Retained earnings (12/31/2020)     ($1,553,000)($845,000)     Total liabilities and equities     ($3,270,000)($1,150,000)                                   1. What is the total fair value of Gardena ?      Hint:Included in the question Your answer :                                                                         2. What is the goodwill of Gardena at acquisition?          Your answer:                            3.What is the amount of Non-Controlling Interest at acquisition (1/1/2020)?         Your answer:                            4. The working paper entry to eliminate any dividend earned from Gardena Corporation during 2020 (consolidation JE D)     Your answer:

Accepted Answer

The date of Acquisition is 01/01/2020

Fair market value of garden corporation on Acquisition date…

Carson, Inc., acquires 80 percent of the outstaniding common stock of Gardena corporation on January 1, 2020, in exchange for $900,000 cash.
At the acquisition date, Gardena's total fair value, including the noncontrolling interest, was assessed at $1,125,000. Also at the acquisition date,
Gardena's book value was $690,000.
Several individual items on Gardena's financial records had fair values that differed from their book values as follows:
					Book value		Fair value
Trademark (indefinite life)			$360,000		$383,000
Property and equipment (net, 8-year remaining useful life)	290,000		330,000
Patent (14-year remaining useful life)		132,000		272,000

For internal reporting purposes, Carson, inc., employs the equity method to account for this investment. The following account balances are for the year
ending December 31, 2020, for both companies. At year-end, there were no intra-entity receivables or payables.

					Carson	Gardena
Revenues					($1,400,000)	($825,000)
Cost of goods sold				774,000	395,750
Depreciation expense				328,000	36,250
Amortization expense				0	28,000
Equity in income of Gardena			($280,000)	0
Net income				($578,000)	($365,000)

Retained earnings (1/1/2020)			($1,275,000)	($530,000)
Net income				($578,000)	($365,000)
Dividends declared				300,000	50,000
Retained earnings (12/31/2020)			($1,553,000)	($845,000)

Current assets				$860,000	$432,250
Investment in Gardena			1,140,000	0
Trademark					240,000	360,000
Property and equipment (net)			1,030,000	253,750
Patents					0	104,000
Total assets				3,270,000	1,150,000
Accounts payable				($142,000)	($145,000)
Common stock				($300,000)	($120,000)
Additional paid-in capital			($1,275,000)	($40,000)
Retained earnings (12/31/2020)			($1,553,000)	($845,000)
Total liabilities and equities			($3,270,000)	($1,150,000)


1. What is the total fair value of Gardena ?				Hint:	Included in the question
Your answer :




2. What is the goodwill of Gardena at acquisition?
Your answer:

3.What is the amount of Non-Controlling Interest at acquisition (1/1/2020)?
Your answer:

4. The working paper entry to eliminate any dividend earned from Gardena Corporation during 2020 (consolidation JE D)
Your answer: