ProForm acquired 70 percent of ClipRite on June 30, 2023, for $1,190,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $720,000 was recognized and is being amortized at the rate of $18,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $510,000 at the acquisition date. The 2024 financial statements are as follows: Items Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/24 Totals Note: Parentheses indicate a credit balance. ProForm $ (880,000) 575,000 180,000 (42,000) $ (167,000) $ (1,900,000) (167,000) 180,000 $ (1,887,000) $ 480,000 370,000 1,190,000 1,800,000 (900,000) $ 2,940,000 $ (853,000) (200,000) (1,887,000) $ (2,940,000) ClipRite $ (760,000) 440,000 140,000 0 $ (180,000) $ (930,000) (180,000) 60,000 $ (1,050,000) $ 380,000 780,000 0 1,000,000 (150,000) $ 2,010,000 $ (760,000) (200,000) (1,050,000) $ (2,010,000) ProForm sold ClipRite inventory costing $77,000 during the last six months of 2023 for $136,000. At year-end, 30 percent remained. ProForm sold ClipRite inventory costing $240,000 during 2024 for $330,000. At year-end, 10 percent is left. Required: With these facts, determine the consolidated balances for the following: Note: Input all amounts as positive values.
ProForm acquired 70 percent of ClipRite on June 30, 2023, for $1,190,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $720,000 was recognized and is being amortized at the rate of $18,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $510,000 at the acquisition date. The 2024 financial statements are as follows: Items Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/24 Totals Note: Parentheses indicate a credit balance. ProForm $ (880,000) 575,000 180,000 (42,000) $ (167,000) $ (1,900,000) (167,000) 180,000 $ (1,887,000) $ 480,000 370,000 1,190,000 1,800,000 (900,000) $ 2,940,000 $ (853,000) (200,000) (1,887,000) $ (2,940,000) ClipRite $ (760,000) 440,000 140,000 0 $ (180,000) $ (930,000) (180,000) 60,000 $ (1,050,000) $ 380,000 780,000 0 1,000,000 (150,000) $ 2,010,000 $ (760,000) (200,000) (1,050,000) $ (2,010,000) ProForm sold ClipRite inventory costing $77,000 during the last six months of 2023 for $136,000. At year-end, 30 percent remained. ProForm sold ClipRite inventory costing $240,000 during 2024 for $330,000. At year-end, 10 percent is left. Required: With these facts, determine the consolidated balances for the following: Note: Input all amounts as positive values.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter8: Property Transactions: Capital Gains And Losses, Section 1231 And Recapture Provisions
Section: Chapter Questions
Problem 38P
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Transcribed Image Text:ProForm acquired 70 percent of ClipRite on June 30, 2023, for $1,190,000 in cash. Based on ClipRite's acquisition-date fair value, an
unrecorded intangible of $720,000 was recognized and is being amortized at the rate of $18,000 per year. No goodwill was
recognized in the acquisition. The noncontrolling interest fair value was assessed at $510,000 at the acquisition date. The 2024
financial statements are as follows:
Items
Sales
Cost of goods sold
Operating expenses
Dividend income
Net income
Retained earnings, 1/1/24
Net income
Dividends declared
Retained earnings, 12/31/24
Cash and receivables
Inventory
Investment in ClipRite
Fixed assets
Accumulated depreciation
Totals
Liabilities
Common stock
Retained earnings, 12/31/24
Totals
Note: Parentheses indicate a credit balance.
ProForm
$ (880,000)
575,000
180,000
(42,000)
$ (167,000)
$ (1,900,000)
(167,000)
180,000
$ (1,887,000)
$ 480,000
370,000
1,190,000
1,800,000
(900,000)
$ 2,940,000
$ (853,000)
(200,000)
(1,887,000)
$ (2,940,000)
ClipRite
$ (760,000)
440,000
140,000
0
$ (180,000)
$ (930,000)
(180,000)
60,000
$ (1,050,000)
$ 380,000
780,000
0
1,000,000
(150,000)
$ 2,010,000
$ (760,000)
(200,000)
(1,050,000)
$ (2,010,000)
ProForm sold ClipRite inventory costing $77,000 during the last six months of 2023 for $136,000. At year-end, 30 percent remained.
ProForm sold ClipRite inventory costing $240,000 during 2024 for $330,000. At year-end, 10 percent is left.
Required:
With these facts, determine the consolidated balances for the following:
Note: Input all amounts as positive values.
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