On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $57,732. Calvin Co. has one recorded asset, a specialized production machine with a book value of $10,300 and no liabilities. The fair value of the machine is $82,300, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin’s total acquisition date fair value is $96,220. At the end of the year, Calvin reports the following in its financial statements: Revenues $ 60,750 Machine $ 9,270 Common stock $ 10,300 Expenses 22,350 Other assets 34,430 Retained earnings 33,400 Net income $ 38,400 Total assets $ 43,700 Total equity $ 43,700 Dividends paid $ 5,000 Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin’s machine (net of accumulated depreciation), and the process trade secret.

On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $57,732. Calvin Co. has one recorded asset, a specialized production machine with a book value of $10,300 and no liabilities. The fair value of the machine is $82,300, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin’s total acquisition date fair value is $96,220. At the end of the year, Calvin reports the following in its financial statements: Revenues $ 60,750 Machine $ 9,270 Common stock $ 10,300 Expenses 22,350 Other assets 34,430 Retained earnings 33,400 Net income $ 38,400 Total assets $ 43,700 Total equity $ 43,700 Dividends paid $ 5,000 Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin’s machine (net of accumulated depreciation), and the process trade secret.

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

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 12GI

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Revenues	$	60,750	Machine	$	9,270	Common stock	$	10,300
Expenses		22,350	Other assets		34,430	Retained earnings		33,400
Net income	$	38,400	Total assets	$	43,700	Total equity	$	43,700
Dividends paid	$	5,000