ADV. ACCT CONNECT STAND ALONE
13th Edition
ISBN: 9781266295744
Author: Hoyle
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
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.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
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.…
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…
Chapter 7 Solutions
ADV. ACCT CONNECT STAND ALONE
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
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Mighty Company purchased a 60 percent interest in Lowly Company on January 1, 2020, for $459,900 in cash. Lowly's book value at that date was reported as $637,500, and the fair value of the noncontrolling interest was assessed at $306,600. 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 $380,000 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 $899,500, a figure that rises to $961,750 (common stock of $300,000 and retained earnings of $661,750) by year-end. Mighty's book value was $1.90 million at the beginning of 2021 and $2.00 million (common stock of $1 million and retained earnings of $1,000,000) at December 31, 2021. No intra-entity transactions have occurred, and no additional stock has…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_forwardProForm acquired 70 percent of ClipRite on June 30, 2017, for $910,000 in cash. Based on Clip- Rite’s acquisition-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $10,000 per year. No goodwill was recognized in the acquisition.The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2018 financial statements are as follows:ProForm sold ClipRite inventory costing $72,000 during the last six months of 2017 for $120,000. At year-end, 30 percent remained. ProForm sells ClipRite inventory costing $200,000 during 2018 for $250,000. At year-end, 10 percent is left. With these facts, determine the consolidated balances for the following:SalesCost of Goods SoldOperating ExpensesDividend IncomeNet Income Attributable to Noncontrolling InterestInventoryNoncontrolling Interest in Subsidiary, 12/31/18arrow_forward
- ProForm acquired 70 percent of ClipRite on June 30, 2017, for $910,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $10,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2018 financial statements are as follows: ProForm ClipRite $ (800,000) $ (600,000) 400,000 Sales Cost of goods sold Operating expenses 535,000 100,000 100,000 Dividend income (35,000) $ (200,000) $ (100,000) -0- Net income $ (1,300,000) $ (850,000) (100,000) 50,000 Retained earnings, 1/1/18 Net income (200,000) Dividends declared 100,000 Retained earnings, 12/31/18 $ (1,400,000) $ (900,000) $ 400,000 $ 300,000 700,000 Cash and receivables Inventory .... Investment in ClipRite. 290,000 910,000 -0- Fixed assets 1,000,000 600,000 Accumulated depreciation (300,000) $ 2,300,000 (200,000) Totals $1,400,000 $ (600,000) $…arrow_forwardParson Company acquired an 80 percent interest in Syber Company on January 1, 2017. Any portion of Syber’s business fair value in excess of its corresponding book value was assigned to trademarks. This intangible asset has subsequently undergone annual amortization based on a 15-year life. Over the past two years, regular intra-entity inventory sales transpired between the two companies. No payment has yet been made on the latest transfer. All dividends are paid in the same period as declared.Parson Company acquired an 80 percent interest in Syber Company on January 1, 2017. Any portion of Syber’s business fair value in excess of its corresponding book value was assigned to trademarks. This intangible asset has subsequently undergone annual amortization based on a 15-year life. Over the past two years, regular intra-entity inventory sales transpired between the two companies. No payment has yet been made on the latest transfer. All dividends are paid in the same period as declared.a.…arrow_forwardProtrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $612,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft’s identifiable assets and liabilities at a collective net fair value of $765,000 and the fair value of the 20 percent noncontrolling interest was $153,000. No excess fair value over book value amortization accompanied the acquisition.The following selected account balances are from the individual financial records of these two companies as of December 31, 2018: Protrade Seacraft Sales $880000 $600000 Cost of goods sold 410000 317000 Operating expenses 174000 129000 Retained earnings, 1/1/18 980000 420000 Inventory 370000 144000 Buildings (net) 382000 181000 Investment income not given -0- Each of the following problems is an independent situation:a. Assume that Protrade sells Seacraft inventory at a markup equal to 60 percent of cost. Intra-entity transfers…arrow_forward
- The Individual financial statements for Abbey Company and Bellstar Company for the year ending December 31, 2024, follow. Abbey acquired a 60 percent Interest in Bellstar on January 1, 2023, in exchange for various considerations totaling $420,000. At the acquisition date, the fair value of the noncontrolling interest was $280,000 and Bellstar's book value was $550,000. Bellstar had developed internally a trademark that was not recorded on its books but had an acquisition-date fair value of $150,000. This Intangible asset is being amortized over 20 years. Abbey uses the partial equity method to account for its Investment In Bellstar. Abbey sold Bellstar land with a book value of $70,000 on January 2, 2023, for $140,000. Bellstar still holds this land at the end of the current year. Bellstar regularly transfers Inventory to Abbey. In 2023, it shipped Inventory costing $130,000 to Abbey at a price of $200,000. During 2024, Intra-entity shipments totaled $250,000, although the original…arrow_forwardP Incorporated purchased 80% of The S Company on January 2, 2014, when S's book value was $800,000. P paid $700,000 for their acquisition, and the fair value of noncontrolling interest was $175,000. At the date of acquisition, the fair value and book value of S's identifiable assets and liabilities were equal. At the end of the year, the separate companies reported the following balances. Assuming that S has paid no dividends during the year, what is the ending balance of the noncontrolling interest in the subsidiary? Current assets 5,700,000 1,250,000 3,400,000 Plant & equipment Investment in Solar 15,200,000 780,000 0 Goodwill 0 0 Current liabilities 3,600,000 950,000 11,680,000 2,800,000 Long-term debt Stockholder's Equity 6,400,000 900,000arrow_forwardOn January 1, 2018, Sneezy Company purchased patent at a cost of P1,920,000 at which date the remaining legal life was 16 years. On January 1, 2020, the useful life of the patent was determined to be only 8 years from the date of acquisition. On January 1, 2020, the entity paid P800,000, of which three-fourths was for a trademark, and one-fourth was for the other entity's agreement not to compete for a 5-year period in the line of business covered by the trademark. The entity considered the life of the trademark indefinite. Moreover, the entity agreed to pay P50,000 to the other entity as consulting fee each year for 5 years payable every January 1. What is the amortization of intangible assets for 2020?arrow_forward
- P Incorporated purchased 80% of The S Company on January 2, 2014, when S's book value was $800,000. P paid $700,000 for their acquisition, and the fair value of noncontrolling interest was $175,000. At the date of acquisition, the fair value and book value of S's identifiable assets and liabilities were equal. At the end of the year, the separate companies reported the following balances. Assuming that S has paid no dividends during the year, what is the ending balance of the noncontrolling interest in the subsidiary? Current assets 5,700,000 1,250,000 Plant & equipment 15,200,000 3,400,000 Investment in Solar 780,000 0 Goodwill 0 0 Current liabilities 3,600,000 950,000 Long-term debt 11,680,000 2,800,000 Stockholder's Equity 6,400,000 900,000 Your answerarrow_forwardP Incorporated purchased 80% of The S Company on January 2, 2014, when S's book value was $800,000. P paid $700,000 for their acquisition, and the fair value of noncontrolling interest was $175,000. At the date of acquisition, the fair value and book value of S's identifiable assets and liabilities were equal. At the end of the year, the separate companies reported the following balances. Assuming that S has paid no dividends during the year, what is the ending balance of the noncontrolling interest in the subsidiary?arrow_forwardOn January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1,666,000 in cash. The price paid was proportionate to Sellinger’s total fair value, although at the acquisition date, Sellinger had a total book value of $2,070,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger’s accounting records by $300,000. On January 1, 2018, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $656,250 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger. During the two years following the acquisition, Sellinger reported the following net income and dividends: 2017 2018 $525,000 $701,000 Net…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning