On January 1, 2015, Pub Corporation made a significant acquisition, purchasing 75 percent of Sub Corporation's outstanding voting stock for a total of $4,200,000. Sub Corporation's stockholders' equity at that time was made up of the following components (all values in thousands): Capital stock with a par value of $10: Additional paid-in capital: Retained earnings as of December 31, 2014: Total stockholders' equity: The surplus fair value of the net assets obtained from this acquisition was allocated as follows: 10 percent to underappreciated inventory (which was subsequently sold in 2015), 40 percent to underappreciated plant assets with a remaining useful life of eight years, and the remaining 50 percent to goodwill. Other assets- -net Fast forward to December 31, 2019, and we have the comparative trial balances for both Pub Corporation and Sub Corporation. Investment in Sub-75% Expenses (including cost of sales) Dividends $2,000 $1200 $1500 Capital stock, $10 par Additional paid-in capital Retained earnings Sales Income from Sub $4700 Pub $5,845 3,640 5,285 600 $15370 $4,000 850 2,670 7380 470 $15370 Sub $4500 800 300 $5600 $2,000 1200 1500 900 $5600
On January 1, 2015, Pub Corporation made a significant acquisition, purchasing 75 percent of Sub Corporation's outstanding voting stock for a total of $4,200,000. Sub Corporation's stockholders' equity at that time was made up of the following components (all values in thousands): Capital stock with a par value of $10: Additional paid-in capital: Retained earnings as of December 31, 2014: Total stockholders' equity: The surplus fair value of the net assets obtained from this acquisition was allocated as follows: 10 percent to underappreciated inventory (which was subsequently sold in 2015), 40 percent to underappreciated plant assets with a remaining useful life of eight years, and the remaining 50 percent to goodwill. Other assets- -net Fast forward to December 31, 2019, and we have the comparative trial balances for both Pub Corporation and Sub Corporation. Investment in Sub-75% Expenses (including cost of sales) Dividends $2,000 $1200 $1500 Capital stock, $10 par Additional paid-in capital Retained earnings Sales Income from Sub $4700 Pub $5,845 3,640 5,285 600 $15370 $4,000 850 2,670 7380 470 $15370 Sub $4500 800 300 $5600 $2,000 1200 1500 900 $5600
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
Related questions
Question
Determine the amounts that would appear in the consolidated financial statements of Pub Corporation and Sub for each of the following:
1.
2. Non-controlling interest share for 2019
3. Consolidated
4. Consolidated retained earnings at December 31, 2019
5. Consolidated net income for 2019
6. Non-controlling interest at December 31, 2018
7. Non-controlling interest at December 31, 2019
Transcribed Image Text:On January 1, 2015, Pub Corporation made a significant acquisition, purchasing 75 percent of Sub
Corporation's outstanding voting stock for a total of $4,200,000. Sub Corporation's stockholders'
equity at that time was made up of the following components (all values in thousands):
Capital stock with a par value of $10:
Additional paid-in capital:
Retained earnings as of December 31, 2014:
Total stockholders' equity:
The surplus fair value of the net assets obtained from this acquisition was allocated as follows: 10
percent to underappreciated inventory (which was subsequently sold in 2015), 40 percent to
underappreciated plant assets with a remaining useful life of eight years, and the remaining 50 percent
to goodwill.
Other assets- -net
Investment in Sub 75%
Expenses (including cost of sales)
Dividends
$2,000
$1200
$1500
Fast forward to December 31, 2019, and we have the comparative trial balances for both Pub
Corporation and Sub Corporation.
Capital stock, $10 par
Additional paid-in capital
Retained earnings
Sales
Income from Sub
$4700
Pub
$5,845
3,640
5,285
600
$15370
$4,000
850
2,670
7380
470
$15370
Sub
$4500
800
300
$5600
$2,000
1200
1500
900
$5600
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