Soft Bound Version for Advanced Accounting 13th Edition
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.…
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