ADVANCED ACCOUNTING W/ACCESS >CUSTOM<
14th Edition
ISBN: 9781307594683
Author: Hoyle
Publisher: MCG/CREATE
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Chapter 4, Problem 16P
To determine
Introduction: Consolidated financial statements are the single set of statements that combines two or more companies to create a single economic entity. A consolidated
The number of trademarks reported in the 2021 consolidated balance sheet.
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On January 1, 2023, French Company acquired 60 percent of K-Tech Company for $342,000 when K-Tech's book value was
$442,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $228,000. At the acquisition
date, K-Tech's trademark (10-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (5-
year remaining life) was undervalued by $48,000.
In 2023, K-Tech reports $8,000 net income and declares no dividends. At the end of 2024, the two companies report the following
figures (stockholders' equity accounts have been omitted):
Items
Current assets
Trademarks
Patented technology
Liabilities
French Company
Carrying Amounts
$ 644,000
284,000
434,000
(414,000)
K-Tech Company
Carrying
Amounts
$ 324,000
224,000
174,000
K-Tech Company
Fair Values
$ 344,000
304,000
222,000
(144,000)
Revenues
Expenses
Investment income
(144,000)
(924,000)
(424,000)
476,000
324,000
Not given
0
Note: Parentheses indicate a credit…
On January 1, 2023, French Company acquired 60 percent of K-Tech Company for $319,500 when K-Tech's book value was $419,500.
The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $213,000. At the acquisition date, K-Tech's
trademark (10-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (5-year remaining
life) was undervalued by $33,000.
In 2023, K-Tech reports $19,500 net income and declares no dividends. At the end of 2024, the two companies report the following
figures (stockholders' equity accounts have been omitted):
Items
Current assets
Trademarks
Patented technology
Liabilities
Revenues
French Company
Carrying Amounts
$ 631,000
271,000
421,000
(401,000)
K-Tech Company
Carrying Amounts
$ 311,000
211,000
161,000
K-Tech Company
Fair Values
$ 331,000
291,000
194,000
(131,000)
0
(131,000)
(911,000)
(411,000)
Expenses
489,000
311,000
Investment income
Not given
0
Note: Parentheses indicate a credit…
On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $300,000 when K-Tech's
book value was $400,000. The fair value of the newly comprised 40 percent noncontrolling interest was
assessed at $200,000. At the acquisition date, K-Tech's trademark (10-year remaining life) was undervalued
in its financial records by $60,000. Also, patented technology (5-year remaining life) was undervalued by
$40,000.
In 2020, K-Tech reports $30,000 net income and declares no dividends. At the end of 2021, the two
companies report the following figures (stockholders' equity accounts have been omitted):
К-Теch
Company
Fair
Values
French
Company
Carrying
Amounts
К-Тech
Company
Carrying
Amounts
Current
$ 620,000 $ 300,000
$ 320,000
assets
Trademarks
Patented
260,000
200,000
280,000
410,000
150,000
190,000
technology
Liabilities
Revenues
Expenses
Investment
income
(390,000)
(900,000)
500,000
(120,000)
(400,000)
300,000
(120,000)
Not given
Note: Parentheses indicate a credit balance.
Vhat…
Chapter 4 Solutions
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- On January 2, 2020, Kent Corp. paid 1,600,000 for the purchase of 40% of the ordinary shares of Kara Company. The statement of financial position of Kara at the date of acquisition shows the following information:Assets subject to depreciation (remaining useful life is 8 years) 2,400,000Assets not subject to depreciation 800,000Liabilties 400,000Both book value and fair value are the same for assets not subject to depreciation and liabilities. The fair market value of Karas assets subject to depreciation is 2,720,000. Kara depreciates its assets using the straight-line method. Karas intangibles are amortized over a 20-year period. Net income for the year ended December 31, 2020, is 640,000. It declares and pays dividends of 500,000 in 2020.What amount of the investment cost is attributable to goodwill? a. 480,000 b. 352,000 c. 608,000 d. 128,000arrow_forwardUse the following information for Problems 14 through 16:West Company acquired 60 percent of Solar Company for $300,000 when Solar’s book value was $400,000. The newly comprised 40 percent noncontrolling interest had an assessed fair value of $200,000. Also at the acquisition date, Solar had a trademark (with a 10-year remaining life) that was undervalued in the financial records by $60,000. Also, patented technology (with a 5-year remaining life) was undervalued by $40,000. Two years later, the following figures are reported by these two companies (stockholders’ equity accounts have been omitted):What is the consolidated net income before allocation to the controlling and noncontrolling interests?a. $400,000b. $486,000c. $491,600d. $500,000arrow_forwardUse the following information for Problems 14 through 16:West Company acquired 60 percent of Solar Company for $300,000 when Solar’s book value was $400,000. The newly comprised 40 percent noncontrolling interest had an assessed fair value of $200,000. Also at the acquisition date, Solar had a trademark (with a 10-year remaining life) that was undervalued in the financial records by $60,000. Also, patented technology (with a 5-year remaining life) was undervalued by $40,000. Two years later, the following figures are reported by these two companies (stockholders’ equity accounts have been omitted):What is the consolidated trademarks balance?a. $508,000b. $514,000c. $520,000d. $540,000arrow_forward
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