Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Chapter 7, Problem 26P
To determine
Identify the worksheet entries which are required to consolidate these two companies for 2018 and find the net income attributable to the non-controlling interest for this year.
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Mighty Company purchased a 60 percent interest in Lowly Company on January 1, 2017, for $558,900 in cash. Lowly's book value at that date was reported as $817,500 and the fair value of the noncontrolling interest was assessed at $372,600. Any excess acquisition-date fair value over Lowly's book value is assigned to trademarks to be amortized over 20 years. Subsequently, on January 1, 2018, Lowly acquired a 20 percent interest in Mighty. The price of $362,000 was equivalent to 20 percent of Mighty's book and fair value.
Neither company has paid dividends since these acquisitions occurred. On January 1, 2018, Lowly's book value was $1,060,500, a figure that rises to $1,105,750 (common stock of $300,000 and retained earnings of $805,750) by year-end. Mighty's book value was $1.81 million at the beginning of 2018 and $1.91 million (common stock of $1 million and retained earnings of $910,000) at December 31, 2018. No intra-entity transactions have occurred and no additional stock has been…
Mighty Company purchased a 60 percent interest in Lowly Company on January 1, 2017, for $567,600 in cash. Lowly's book value at that date was reported as $760,000 and the fair value of the noncontrolling interest was assessed at $378,400. Any excess acquisition-date fair value over Lowly's book value is assigned to trademarks to be amortized over 20 years. Subsequently, on January 1, 2018, Lowly acquired a 20 percent interest in Mighty. The price of $440,000 was equivalent to 20 percent of Mighty's book and fair value.
Neither company has paid dividends since these acquisitions occurred. On January 1, 2018, Lowly's book value was $992,000, a figure that rises to $1,054,500 (common stock of $300,000 and retained earnings of $754,500) by year-end. Mighty's book value was $2.20 million at the beginning of 2018 and $2.30 million (common stock of $1 million and retained earnings of $1,300,000) at December 31, 2018. No intra-entity transactions have occurred and no additional stock has been…
Mighty Company purchased a 60 percent interest in Lowly Company on January 1, 2017, for $420,000 in cash. Lowly’s book value at that date was reported as $600,000 and the fair value of the noncontrolling interest was assessed at $280,000. Any excess acquisition-date fair value over Lowly’s book value is assigned to trademarks to be amortized over 20 years. Subsequently, on January 1, 2018, Lowly acquired a 20 percent interest in Mighty. The price of $240,000 was equivalent to 20 percent of Mighty’s book and fair value.Neither company has paid dividends since these acquisitions occurred. On January 1, 2018, Lowly’s book value was $800,000, a figure that rises to $840,000 (common stock of $300,000 and retained earnings of $540,000) by year-end. Mighty’s book value was $1.7 million at the beginning of 2018 and $1.8 million (common stock of $1 million and retained earnings of $800,000) at December 31, 2018. No intra-entity transactions have occurred and no additional stock has been sold.…
Chapter 7 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
Ch. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - How does the presence of an indirect ownership...Ch. 7 - Prob. 5QCh. 7 - In accounting for mutual ownerships, what is the...Ch. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10Q
Ch. 7 - Prob. 11QCh. 7 - Jones acquires Wilson, in part because the new...Ch. 7 - Prob. 13QCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Which of the following is correct for two...Ch. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10PCh. 7 - Prob. 11PCh. 7 - Prob. 12PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - On January 1, 2016, Uncle Company purchased 80...Ch. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 - Clarke has a controlling interest in Rogerss...Ch. 7 - Prob. 21PCh. 7 - Prob. 22PCh. 7 - Prob. 23PCh. 7 - Prob. 24PCh. 7 - Prob. 25PCh. 7 - Prob. 26PCh. 7 - Prob. 27PCh. 7 - Prob. 28PCh. 7 - Prob. 29PCh. 7 - Prob. 1DYSCh. 7 - Prob. 2DYS
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- On May 1, 2015, Zoe Inc. purchased Branta Corp. for $15,000,000 in cash. They only received $12,000,000 in net assets. In 2016, the market value of the goodwill obtained from Branta Corp. was valued at $4,000,000, but in 2017 it dropped to $2,000,000. Prepare the journal entry for the creation of goodwill and the entry to record any impairments to it in subsequent years.arrow_forwardMystic Pizza Company purchased a patent from Prime Pizza Plus on January 1, 2019, for 72,000. The patent has a remaining legal life of 9 years. Prepare the journal entries to record the acquisition and the amortization for 2019, assuming Mystic Pizza amortizes its patents using the straight-line method over the life of the asset.arrow_forwardMighty Company purchased a 60 percent interest in Lowly Company on January 1, 2020, for $518,400 in cash. Lowly's book value at that date was reported as $730,000, and the fair value of the noncontrolling interest was assessed at $345,600. Any excess acquisition-date fair value over Lowly's book value is assigned to trademarks to be amortized over 20 years. Subsequently, on January 1, 2021, Lowly acquired a 20 percent interest in Mighty. The price of $322,000 was equivalent to 20 percent of Mighty's book and fair value.  Neither company has paid dividends since these acquisitions occurred. On January 1, 2021, Lowly's book value was $985,000, a figure that rises to $1,026,500 (common stock of $300,000 and retained earnings of $726,500) by year-end. Mighty's book value was $1.61 million at the beginning of 2021 and $1.71 million (common stock of $1 million and retained earnings of $710,000) at December 31, 2021. No intra-entity transactions have occurred, and no additional stock has…arrow_forward
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