ProForm acquired 60 percent of ClipRite on June 30, 2020, for $1,140,000 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 $15,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $760,000 at the acquisition date. The 2021 financial statements are as follows: Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/21 Net income Dividends declared. Retained earnings, 12/31/21 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation. Totals Liabilities Common stock Retained earnings, 12/31/21 Totals Sales Cost of Goods Sold ProForm ClipRite $ (900,000) $ (800,000) 450,000 585,000 200,000 (48,000) 150,000 0 $ (163,000) $ (200,000) $ (950,000) (200,000) 80,000 $(1,070,000) $ 400,000 800,000 0 $(2,300,000) (163,000) 200,000 $(2,263,000) $ 500,000 390,000 1,140,000 2,000,000 (700,000) $ 3,330,000 $ (667,000) (400,000) (2,263,000) $(3,330,000) (Note: Parentheses indicate a credit balance.) ClipRite sold ProForm inventory costing $79,000 during the last six months of 2020 for $190,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $250,000 during 2021 for $350,000. At year-end, 10 percent is left. Determine the consolidated balances for the following: (Input all amounts as positive values.) Sales Cost of goods sold Operating expenses Dividend income Net income attributable to noncontrolling interest Inventory Noncontrolling interest in subsidiary, 12/31/21 Operating Expenses Dividend Income Net Income Attributable to Noncontrolling Interest Inventory Noncontrolling Interest in Subsidiary, 12/31/21 1,100,000 (250,000) $ 2,050,000 $ (580,000) (400,000) (1,070,000) $(2,050,000) > Answer is complete but not entirely correct. Consolidated Balance $ $ $ $ $ $ $ 1,350,000 661,700 365,000 0✓ 83,320 1,180,000✔ 615,000
ProForm acquired 60 percent of ClipRite on June 30, 2020, for $1,140,000 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 $15,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $760,000 at the acquisition date. The 2021 financial statements are as follows: Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/21 Net income Dividends declared. Retained earnings, 12/31/21 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation. Totals Liabilities Common stock Retained earnings, 12/31/21 Totals Sales Cost of Goods Sold ProForm ClipRite $ (900,000) $ (800,000) 450,000 585,000 200,000 (48,000) 150,000 0 $ (163,000) $ (200,000) $ (950,000) (200,000) 80,000 $(1,070,000) $ 400,000 800,000 0 $(2,300,000) (163,000) 200,000 $(2,263,000) $ 500,000 390,000 1,140,000 2,000,000 (700,000) $ 3,330,000 $ (667,000) (400,000) (2,263,000) $(3,330,000) (Note: Parentheses indicate a credit balance.) ClipRite sold ProForm inventory costing $79,000 during the last six months of 2020 for $190,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $250,000 during 2021 for $350,000. At year-end, 10 percent is left. Determine the consolidated balances for the following: (Input all amounts as positive values.) Sales Cost of goods sold Operating expenses Dividend income Net income attributable to noncontrolling interest Inventory Noncontrolling interest in subsidiary, 12/31/21 Operating Expenses Dividend Income Net Income Attributable to Noncontrolling Interest Inventory Noncontrolling Interest in Subsidiary, 12/31/21 1,100,000 (250,000) $ 2,050,000 $ (580,000) (400,000) (1,070,000) $(2,050,000) > Answer is complete but not entirely correct. Consolidated Balance $ $ $ $ $ $ $ 1,350,000 661,700 365,000 0✓ 83,320 1,180,000✔ 615,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 18E
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