Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2017 and 2018, 30 percent of the current year purchases remain in Smashing's inventory. 1. Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2018. 2. Prepare the worksheet adjustments for the December 31, 2018, consolidation of Corgan and Smashing.
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- On January 1, 2017, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $980,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $700,000, retained earnings of $250,000, and a noncontrolling interest fair value of $245,000. Corgan attributed the excess of fair value over Smashing’s book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing. Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2017 and 2018, 40 percent of the current year purchases remain in Smashing’s inventory. Compute the equity method balance in Corgan’s Investment in Smashing, Inc., account as of December 31, 2018. Prepare the worksheet adjustments for the December 31, 2018, consolidation of Corgan and Smashing.On January 1, 2017, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $980,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $700,000, retained earnings of $250,000, and a noncontrolling interest fair value of $245,000. Corgan attributed the excess of fair value over Smashing’s book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing.During the next two years, Smashing reported the following: Net Income Dividends declared Inventory purchases from Corgan 2017 $150000 $35000 $100000 2018 130000 45000 120000 Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2017 and 2018, 40 percent of the current year purchases remain in Smashing’s inventory.a. Compute the equity method balance in Corgan’s Investment in Smashing, Inc., account as of December 31, 2018. b. Prepare the…On January 1, 2017, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,155,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $840,000, retained earnings of $390,000, and a noncontrolling interest fair value of $495,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing. During the next two years, Smashing reported the following: Net Income Dividends Declared Inventory Purchases from Corgan 2017 $ 290,000 $ 49,000 $ 240,000 2018 270,000 59,000 260,000 Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2017 and 2018, 40 percent of the current year purchases remain in Smashing's inventory. Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December…
- On January 1, 2017, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $980,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $700,000, retained earnings of $250,000, and a noncontrolling interest fair value of $245,000. Corgan attributed the excess of fair value over Smashing’s book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing.During the next two years, Smashing reported the following:Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2017 and 2018, 40 percent of the current year purchases remain in Smashing’s inventory.a. Compute the equity method balance in Corgan’s Investment in Smashing, Inc., account as of December 31, 2018.b. Prepare the worksheet adjustments for the December 31, 2018, consolidation of Corgan and Smashing.On January 1, 2017, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,540,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $950,000, retained earnings of $500,000, and a noncontrolling interest fair value of $660,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing. During the next two years, Smashing reported the following: Net Income 2017 $400,000 2018 380,000 Dividends Declared $ 60,000 70,000 Inventory Purchases from Corgan $ 350,000 370,000 Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2017 and 2018, 30 percent of the current year purchases remain in Smashing's inventory. A.) Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2018. B.) Prepare the…On January 1, 2023, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Incorporated, for a total of $1,440,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $870,000, retained earnings of $420,000, and a noncontrolling Interest fair value of $360,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for Its Investment in Smashing. During the next two years, Smashing reported the following: Dividends Declared Items 2023 2024 Net Income $ 320,000 300,000 $ 52,000 62,000 Required A Required B Inventory Purchases from Corgan Corgan sells Inventory to Smashing using a 60 percent markup on cost. At the end of 2023 and 2024, 40 percent of the current year purchases remain in Smashing's Inventory. Required: a. Compute the equity method balance in Corgan's Investment in Smashing, Incorporated, account as of…
- On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,435.000 in cash and other consideration. At the acquisition date, Smashing had common stock of $920,000, retained earnings of $470,000, and a noncontrolling interest fair value of $615,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing. During the next two years, Smashing reported the following: Net Income 2020 $370,000 2021 350,000 Dividends Declared $57,000 67,000 Inventory Purchases from Corgan $320,000 340,000 Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2020 and 2021, 30 percent of the current year purchases remain in Smashing's inventory. a. Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2021. b. Prepare the worksheet…On January 1, 2017, Doone Corporation acquired 60 percent of the outstanding voting stock of Rockne Company for $312,000 consideration. At the acquisition date, the fair value of the 40 percent noncontrolling interest was $208,000 and Rockne's assets and liabilities had a collective net fair value of $520,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $150,000 in 2018. Since being acquired, Rockne has regularly supplied inventory to Doone at 25 percent more than cost. Sales to Doone amounted to $210,000 in 2017 and $310,000 in 2018. Approximately 35 percent of the inventory purchased during any one year is not used until the following year. a. What is the noncontrolling interest's share of Rockne's 2018 income? b. Prepare Doone's 2018 consolidation entries required by the intra-entity inventory transfers. Complete this question by entering your answers in the tabs below. Required A Required B What is the…On January 1, 2023, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Incorporated, for a total of $880,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $730,000, retained earnings of $280,000, and a noncontrolling Interest fair value of $220,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing. During the next two years, Smashing reported the following: Itens 2823 2824 Net Incone $188,008 168,000 Dividends Declared $ 38,000 48,000 Inventory Purchases from Corgan $130,000 150,000 Corgan sells Inventory to Smashing using a 60 percent markup on cost. At the end of 2023 and 2024, 50 percent of the current year purchases remain in Smashing's inventory. Required: a. Compute the equity method balance in Corgan's Investment in Smashing, Incorporated, account as of December 31,…
- On January 1, 2017, Doone Corporation acquired 60 percent of the outstanding voting stock of Rockne Company for $300,000 consideration. At the acquisition date, the fair value of the 40 percent noncontrolling interest was $200,000 and Rockne’s assets and liabilities had a collective net fair value of $500,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $160,000 in 2018. Since being acquired, Rockne has regularly supplied inventory to Doone at 25 percent more than cost. Sales to Doone amounted to $250,000 in 2017 and $300,000 in 2018. Approximately 30 percent of the inventory purchased during any one year is not used until the following year.a. What is the noncontrolling interest’s share of Rockne’s 2018 income?b. Prepare Doone’s 2018 consolidation entries required by the intra-entity inventory transfers.On January 1, 2017, Doone Corporation acquired 80 percent of the outstanding voting stock of Rockne Company for $592,000 consideration. At the acquisition date, the fair value of the 20 percent noncontrolling interest was $148,000 and Rockne's assets and liabilities had a collective net fair value of $740,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $260,000 in 2018. Since being acquired, Rockne has regularly supplied inventory to Doone at 25 percent more than cost. Sales to Doone amounted to $320,000 in 2017 and $420,000 in 2018. Approximately 30 percent of the inventory purchased during any one year is not used until the following year. What is the noncontrolling interest's share of Rockne's 2018 income? Prepare Doone's 2018 consolidation entries required by the intra-entity inventory transfers.On January 1, 2018, Jay Company acquired all the outstanding ownership shares of Zee Company. In assessing Zee’s acquisition-date fair values, Jay concluded that the carrying value of Zee’s long-term debt (8-year remaining life) was less than its fair value by $20,000. At December 31, 2018, Zee Company’s accounts show interest expense of $12,000 and long-term debt of $250,000. What amounts of interest expense and long-term debt should appear on the December 31, 2018, consolidated financial statements of Jay and its subsidiary Zee?