Choose the correct. Mattoon, Inc., owns 80 percent of Effingham Company. For the current year, this combined entity reported consolidated net income of $500,000. Of this amount $465,000 was attributable to Mattoon’s controlling interest while the remaining $35,000 was attributable to the noncontrolling interest. Mattoon has 100,000 shares of common stock outstanding and Effingham has 25,000 shares outstanding. Neither company has issued preferred shares or has any convertible securities outstanding. On the face of the consolidated income statement, how much should be reported as Mattoon’s earnings per share?a. $5.00b. $4.65c. $4.00d. $3.88

Choose the correct. Mattoon, Inc., owns 80 percent of Effingham Company. For the current year, this combined entity reported consolidated net income of $500,000. Of this amount $465,000 was attributable to Mattoon’s controlling interest while the remaining $35,000 was attributable to the noncontrolling interest. Mattoon has 100,000 shares of common stock outstanding and Effingham has 25,000 shares outstanding. Neither company has issued preferred shares or has any convertible securities outstanding. On the face of the consolidated income statement, how much should be reported as Mattoon’s earnings per share?a. $5.00b. $4.65c. $4.00d. $3.88

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter8: Consolidated Tax Returns

Section: Chapter Questions

Problem 36P

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Mattoon, Inc., owns 80 percent of Effingham Company. For the current year, this combined entity reported consolidated net income of $674,750. Of this amount $625,000 was attributable to Mattoon’s controlling interest while the remaining $49,750 was attributable to the noncontrolling interest. Mattoon has 125,000 shares of common stock outstanding and Effingham has 33,000 shares outstanding. Neither company has issued preferred shares or has any convertible securities outstanding. On the face of the consolidated income statement, how much should be reported as Mattoon’s earnings per share?
When it purchased Sutton, Inc. on January 1, 20X1, Pavin Corporation issued 500,000 shares of its $5 par voting common stock. On that date the fair value of those shares totaled $4,200,000. Related to the acquisition, Pavin had payments to the attorneys and accountants of $200,000, and stock issuance fees of $100,000. Immediately prior to the purchase, the equity sections of the two firms appeared as follows: Pavin Sutton Common stock $ 4,000,000 $ 700,000 Paid-in capital in excess of par 7,500,000 900,000 Retained earnings 5,500,000 500,000 Total $17,000,000 $2,100,000 Immediately after the purchase, the consolidated balance sheet should report retained earnings of: a. $6,000,000 b. $5,800,000 c. $5,500,000 d. $5,300,000
Arryn, Inc., owns 95 percent of Stark Corporation’s voting stock. The acquisition price exceeded book and fair value by $85,500 which was appropriately attributed to goodwill. Stark holds 15 percent of Arryn’s voting stock. The price paid for the shares by Stark equaled 15 percent of the parent’s book value and the net fair values of its assets and liabilities. During the current year, Arryn reported separate operating income of $228,000 and dividend income from Stark of $52,500. At the same time, Stark reported separate operating income of $78,000 and dividend income from Arryn of $18,000.What is the net income attributable to the noncontrolling interest under the treasury stock approach?a. $4,800b. $2,700c. $24,600d. $26,700
Presented below are two independent situations: (a) Sandhill Inc. acquired 10% of the 420,000 shares of common stock of Schuberger Corporation at a total cost of $15 per share on June 17, 2022. On September 3, Schuberger declared and paid a $120,000 dividend. On December 31, Schuberger reported net income of $520,000 for the year. (b) Blue Corporation obtained significant influence over Hunsaker Company by buying 30% of Hunsaker’s 120,000 outstanding shares of common stock at a cost of $18 per share on January 1, 2022. On May 15, Hunsaker declared and paid a cash dividend of $120,000. On December 31, Hunsaker reported net income of $220,000 for the year. Prepare all necessary journal entries for 2022 for (a) Sandhill and (b) Blue. (List all debit entries before credit entries. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record entries…
On July 1, 2022, when Christ Company's total stockholders' equity was $360,000, Dina Corporation purchased 14,000 shares of Christ's common stock at $30 per share. Christ had 20,000 shares of common stock outstanding both before and after the purchase by Dina, and the book value of Christ's net assets on July 1, 2022 was equal to the fair value. On a consolidated balance sheet prepared at July 1, 2022, goodwill would be:- A) $360,000 B) $420,000 C)$240,000 D) $600,000
Through the payment of $14,222,500 in cash, Drexel Company acquires voting control over Young Company. This price is paid for 60 percent of the subsidiary's 145,000 outstanding common shares ($40 par value) as well as all 26,000 shares of 5 percent, cumulative, $100 par value preferred stock. Of the total payment, $4.6 million is attributed to the fully participating preferred stock with the remainder paid for the common. This acquisition is carried out on January 1, 2021, when Young reports retained earnings of $11.5 million and a total book value of $19.9 million. The acquisition-date fair value of the noncontrolling interest in Young's common stock was $6,415,000. On this same date, a building owned by Young (with a 6-year remaining life) is undervalued in the financial records by $480,000, while equipment with a 15-year remaining life is overvalued by $240,000. Any further excess acquisition-date fair value is assigned to a brand name with a 20-year remaining life. During 2021,…
Can you help me find the consolidated net income? I tried to add all of the operating incomes together, and then subtract the NCI. However, it is telling me that the answer I get is incorrect. First Boston Corporation acquired 80 percent of Gulfside Corporation common stock on January 1, 20X5. Gulfside holds 60 percent of the voting shares of Paddock Company, and Paddock owns 10 percent of the stock of First Boston. All acquisitions were made at underlying book value. The fair value of the noncontrolling interest in Gulfside was equal to 20 percent of the book value of Gulfside when acquired by First Boston, and the fair value of the noncontrolling interest in Paddock was equal to 40 percent of its book value when control was acquired by Gulfside. During 20X7, income from the separate operations of First Boston, Gulfside, and Paddock was $61,000, $51,000, and $67,000, respectively, and dividends of $47,000, $37,000, and $27,000, respectively, were paid. The companies use the cost…
Choose the correct.Arryn, Inc., owns 95 percent of Stark Corporation’s voting stock. The acquisition price exceeded book and fair value by $85,500 which was appropriately attributed to goodwill. Stark holds 15 percent of Arryn’s voting stock. The price paid for the shares by Stark equaled 15 percent of the parent’s book value and the net fair values of its assets and liabilities.During the current year, Arryn reported separate operating income of $228,000 and dividend income from Stark of $52,500. At the same time, Stark reported separate operating income of $78,000 and dividend income from Arryn of $18,000.What is the net income attributable to the noncontrolling interest under the treasury stock approach?a. $4,800b. $2,700c. $24,600d. $26,700
(TCO A) Bend Inc. holds 25% of the outstanding voting shares of Calico Co. and appropriately applies the equity method of accounting. Amortization associated with this investment equals $9,000 per year. For 20X3, Calico reported earnings of $80,000 and paid cash dividends of $30,000. During 20X3, Calico acquired inventory for $57,600, which was then sold to Bend for $90,000. At the end of 20X3, Bend still held some of this inventory at its transfer price of $40,000.Required:(1) Determine the amount of intra-entity profit at the end of 20X3.(2) Determine the amount of Equity in Investee Income that Bend should have reported for 20X3.
On January 1, Year 1, Pacific Corporation acquired 75% of Sand Corporation's 200,000 outstanding common shares for $2,850,000. On January 1, the book value of Sand's net assets was $3,000,000. Book value equaled fair value for all of Sand's assets and liabilities except land, which had a fair value $200,000 greater than book value, and equipment, which had a fair value $150,000 greater than book value. On January 1, Year 1, Sand had a noncompete agreement with a fair value of $300,000. What is the goodwill to be reported on Pacific Corporation's December 31, Year 1 balance sheet under U.S. GAAP? $150,000 $312,500 $362,500 $450,000
The Passers Co. acquired 70% of the net assets of Failures Co. for P1,100,000. The assets of Failures Co. have a book value of P1,200,000 and a fair market value of P1,300,000; its liabilities are P200,000. What is the amount of minority interest in the stockholders’ equity section of the consolidated balance sheet?
Alfonso Inc. acquired 100 percent of the voting shares of BelAire Company on January 1, 2020. In exchange, Alfonso paid $455,000 in cash and issued 100,000 shares of its own $1 par value common stock. On this date, Alfonso’s stock had a fair value of $15 per share. The combination is a statutory merger with BelAire subsequently dissolved as a legal corporation. BelAire’s assets and liabilities are assigned to a new reporting unit. The following shows fair values for the BelAire reporting unit for January 1, 2020 along with respective carrying amounts on December 31, 2021. BelAire Reporting Unit Fair Values1/1/20 Carrying Amounts12/31/21 Cash $ 92,000 $ 49,000 Receivables 208,250 244,000 Inventory 234,000 259,000 Patents 753,500 864,000 Customer relationships 597,250 576,000 Equipment (net) 397,500 297,000 Goodwill ? 410,000 Accounts payable (97,500 ) (187,000 ) Long-term liabilities (640,000 ) (542,000…