Smart owns 80% of Simple. Where is the 20% noncontrolling interest in Simple reported on the balance sheet under the acquisition method? In assets in liabilities between liabilities and stockholders' equity in stockholders' equity
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Smart owns 80% of Simple. Where is the 20% noncontrolling interest in Simple reported on the
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- DeMilo, Inc., owns 100 percent of the 43,000 outstanding shares of Ricardo, Inc. DeMilo currently carries the Investment in Ricardo account at $346,400 using the equity method. Ricardo issues 7,000 new shares to the public for $11.75 per share. How does this transaction affect the Investment in Ricardo account that appears on DeMilo’s financial records?DeMilo, Inc., owns 100 percent of the 40,000 outstanding shares of Ricardo, Inc. DeMilo currently carries the Investment in Ricardo account at $490,000 using the equity method.Ricardo issues 10,000 new shares to the public for $15.75 per share. How does this transaction affect the Investment in Ricardo account that appears on DeMilo’s financial records?Cardo co purchases the net assets of allana co by issuing 50000 shares of their 20 par value shares with a fair value of 40 per share , pays 100000 cash, and payin direct and indirect cost of 75000 and 50000 respectively, determine the total amount of assets to be reported by Cardo Co. after the acquisition
- On January 1, 2023, Mona, Incorporated, acquired 80 percent of Lisa Company’s common stock as well as 60 percent of its preferred shares. Mona paid $82,000 in cash for the preferred stock, with a call value of 110 percent of the $50 per share par value. The remaining 40 percent of the preferred shares traded at a $51,000 fair value. Mona paid $588,000 for the common stock. At the acquisition date, the noncontrolling interest in the common stock had a fair value of $147,000. The excess fair value over Lisa’s book value was attributed to franchise contracts of $74,000. This intangible asset is being amortized over a 40-year period. Lisa pays all preferred stock dividends (a total of $25,000 per year) on an annual basis. During 2023, Lisa’s book value increased by $74,000. On January 2, 2023, Mona acquired one-half of Lisa's outstanding bonds payable to reduce the business combination's debt position. Lisa's bonds had a face value of $100,000 and paid cash interest of 8 percent per year.…On January 1, 2020, Mona, Inc., acquired 80 percent of Lisa Company’s common stock as well as 60 percent of its preferred shares. Mona paid $76,000 in cash for the preferred stock, with a call value of 110 percent of the $50 per share par value. The remaining 40 percent of the preferred shares traded at a $45,000 fair value. Mona paid $588,000 for the common stock. At the acquisition date, the noncontrolling interest in the common stock had a fair value of $147,000. The excess fair value over Lisa’s book value was attributed to franchise contracts of $77,000. This intangible asset is being amortized over a 20-year period. Lisa pays all preferred stock dividends (a total of $19,000 per year) on an annual basis. During 2020, Lisa’s book value increased by $65,000. On January 2, 2020, Mona acquired one-half of Lisa's outstanding bonds payable to reduce the business combination's debt position. Lisa's bonds had a face value of $100,000 and paid cash interest of 8 percent per year. These…On January 1, 2014, Allan acquires 15 percent of Bellevue’s outstanding common stock for $70,800. Allan classifies the investment as an available-for-sale security and records any unrealized holding gains or losses directly in owners’ equity. On January 1, 2015, Allan buys an additional 10 percent of Bellevue for $50,620, providing Allan the ability to significantly influence Bellevue’s decisions. During the next two years, the following information is available for Bellevue: Income Dividends Common StockFair Value (12/31) 2014 $ 125,000 $75,000 $487,500 2015 154,400 89,700 531,600 In each purchase, Allan attributes any excess of cost over book value to Bellevue’s franchise agreements that had a remaining life of 10 years at January 1, 2014. Also at January 1, 2014, Bellevue reports a net book value of $332,000. a. Assume Allan applies the equity method to its Investment in Bellevue account: 1.…
- On January 1, 2020, Mona, Inc., acquired 90 percent of Lisa Company’s common stock as well as 70 percent of its preferred shares. Mona paid $73,000 in cash for the preferred stock, with a call value of 110 percent of the $50 per share par value. The remaining 30 percent of the preferred shares traded at a $42,000 fair value. Mona paid $580,500 for the common stock. At the acquisition date, the noncontrolling interest in the common stock had a fair value of $64,500. The excess fair value over Lisa’s book value was attributed to franchise contracts of $46,000. This intangible asset is being amortized over a 40-year period. Lisa pays all preferred stock dividends (a total of $16,000 per year) on an annual basis. During 2020, Lisa’s book value increased by $118,000. On January 2, 2020, Mona acquired one-half of Lisa's outstanding bonds payable to reduce the business combination's debt position. Lisa's bonds had a face value of $100,000 and paid cash interest of 6 percent per year. These…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. $26,700Prince Corporation holds 75 percent of the common stock of Sword Distributors Inc., purchased on December 31, 20X1, for $2,160,000. At the date of acquisition, Sword reported common stock with a par value of $900,000, additional paid-in capital of $1,250,000, and retained earnings of $540,000. The fair value of the noncontrolling interest at acquisition was $720,000. The differential at acquisition was attributable to the following items: Inventory sold in 20X2 47,500 Land 66,500 Goodwill 76,000 Total Differential 190,000 During 20X2, Prince sold a plot of land that it had purchased several years before to Sword at a gain of $26,600; Sword continues to hold the land. In 20X6, Prince and Sword entered into a five-year contract under which Prince provides management consulting services to Sword on a continuing basis; Sword pays Prince a fixed fee of $94,000 per year for these services. At December 31, 20X8, Sword owed Prince $23,500 as the final 20X8 quarterly payment under…
- On January 1, 2020, Adams acquires 100% of Baker in a transaction accounted for using the acquisition method. Adams will use equity accounting for its investment in Baker. Baker will remain a wholly-owned subsidiary of Adams. The following is information about this acquisition.To pay for this purchase, Adams issues 20,000 shares of common stock with a $5 par and $20 market value. Legal and accounting costs were $50,000. Stock issuance costs were $20,000. If Baker has a net income of $50,000 in 2021, Adams will pay an additional $100,000. At the acquisition date, there is a 40% probability of this occurring.The book value of net assets acquired of Baker was $200,000 at the acquisition date. Adams was willing to pay in excess of book value to acquire Baker because Baker had a building (10-year life) with a book value of $300,000 and a fair value of $340,000. Baker has $40,000 in net income in 2020 and pays a dividend of $30,000. Adams has $100,000 of net income in 2020 and pays a…Duke Corporation owns a 70 percent equity interest in Salem Company, a subsidiary corporation. During the current year, a portion of this stock is sold to an outside party. Before recording this transaction, Duke adjusts the book value of its investment account. What is the purpose of this adjustment?Paul Corporation acquired 80 percent of Saul Company on January 1, 2019, by issuing 118,000 shares of $2 par common stock. The market value of the Paul stock on this date was 24 per share Paul paid $44,000 to a third party for help in arranging the business combination and $51,000 to register and issue the shares issued in the aquisition. On the acquisition date , paul would record a debit to Acquisition expense in the amount of: