On January 1, 2017, Harrison, Inc., acquired 90 percent of Starr Company in exchange for $1,125,000...
On January 1, 2017, Harrison, Inc., acquired 90 percent of Starr Company in exchange for $1,125,000 fair-value consideration. The total fair value of Starr Company was assessed at $1,200,000. Harrison computed annual excess fair-value amortization of $8,000 based on the difference between Starr’s total fair value and its underlying book value. The subsidiary reported net income of $70,000 in 2017 and $90,000 in 2018 with dividend declarations of $30,000 each year. Apart from its investment in Starr, Harrison had net income of $220,000 in 2017 and $260,000 in 2018.
a. What is the consolidated net income in each of these two years?
b. What is the balance of the noncontrolling interest in Starr at December 31, 2018?
Homework Answers
| Consolidted Net income | ||
| Particulars | 2017 | 2018 |
| Harrison income | 2,20,000 | 2,60,000 |
| Starr income | 70,000 | 90,000 |
| Acquisition-date excess fair value amortization | -8,000 | -8,000 |
| Consolidated net income | 2,82,000 | 3,42,000 |
| Non-controlling interest in Starr at December 31, 2018 | ||
| Particulars | Amt($) | |
| Star fair value | 12,00,000 | |
| Fair value of consideration transferred | 11,25,000 | |
| Noncontrolling interest fair value january 1,2017 | 75,000 | |
| 2017 income to NCI ([$70,000 - $8,000] × 10%) | 6,200 | |
| 2017 dividends to NCI | -3,000 | |
| Noncontrolling interest reported value December 31, 2017 (75000+6200-3000) | 78,200 | |
| 2018 income to NCI (($90,000 - $8,000) × 10%) | 8,200 | |
| 2018 dividends to NCI | -3,000 | |
| Noncontrolling interest reported value December 31, 2018 (78200+8200-3000) | 83,400 | |
Add Answer to:
On January 1, 2017, Harrison, Inc., acquired 90 percent of Starr
Company in exchange for $1,125,000...
On January 1, 2017, Harrison, Inc., acquired 90 percent of Starr Company in exchange for $1,125,000...
On January 1, 2017, Harrison, Inc., acquired 90 percent of Starr Company in exchange for $1,125,000 fair-value consideration. The total fair value of Starr Company was assessed at $1,200,000. Harrison computed annual excess fair- value amortization of $8,000 based on the difference between Starr's total fair value and its underlying book value. The subsidiary reported net income of $70,000 in 2017 and $90,000 in 2018 with dividend declarations of $30,000 each year. Apart from its investment in Starr, Harrison had...
On January 1, 2017, Harrison, Inc., acquired 90 percent of Starr Company in exchange for $1,125,000 fair-value consideration
On January 1, 2017, Harrison, Inc., acquired 90 percent of Starr Company in exchange for $1,125,000 fair-value consideration. The total fair value of Starr Company was assessed at $1,200,000. Harrison computed annual excess fair-value amortization of $8,000 based on the difference between Starr's total fair value and its underlying book value. The subsidiary reported net income of $70,000 in 2017 and $90,000 in 2018 with dividend declarations of $30,000 each year. Apart from its investment in Starr, Harrison had net...
ProForm acquired 80 percent of ClipRite on June 30, 2017, for $800,000 in cash. Based on...
ProForm acquired 80 percent of ClipRite on June 30, 2017, for
$800,000 in cash. Based on ClipRite's acquisition-date fair value,
an unrecorded intangible of $500,000 was recognized and is being
amortized at the rate of $17,000 per year. No goodwill was
recognized in the acquisition. The noncontrolling interest fair
value was assessed at $200,000 at the acquisition date. The 2018
financial statements are as follows:
ProForm sold ClipRite
inventory costing $81,000 during the last six months of 2017 for
$210,000....
Placid Lake Corporation acquired 90 percent of the outstanding voting stock of Scenic, Inc., on January...
Placid Lake Corporation acquired 90 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a net book value of $520,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $5,000 per year. Placid Lake's 2018 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $420,000. Scenic reported net income of $230,000. Placid Lake declared $110,000 in dividends during this period;...
On January 1, 2017, Travers Company acquired 90 percent of Yarrow Company's outstanding stock for $945,000...
On January 1, 2017, Travers Company acquired 90 percent of Yarrow Company's outstanding stock for $945,000 The 10 percent noncontrolling interest had an assessed fair value of $105,000 on that date. Any acquisition-date excess fair value over book value was attributed to an unrecorded customer list developed by Yarrow with a emaining life of 15 years. On the same date, Yarrow acquired an 80 percent interest in Stookey Company for $544,000. At the acquisition date, the 20 percent noncontrolling interest...
On July 1, 2018, Truman Company acquired a 70 percent interest in Atlanta Company in exchange...
On July 1, 2018, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $767,200 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $328,800 both before and after Truman's acquisition. In reviewing its acquisition, Truman assigned a $138,500 fair value to a patent recently developed by Atlanta, even though it was not recorded within the financial records of the subsidiary. This patent is...
On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company...
On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1,277,500 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 $1,500,000. 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 $315,000. On January 1, 2018, Palka acquired an additional...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $476,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $705,000 and the fair value of the 20 percent noncontrolling interest was $119,000. 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...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $428,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $585,000 and the fair value of the 20 percent noncontrolling interest was $107,000. 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...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Protrade 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...
On January 1, 2017, Harrison, Inc., acquired 90 percent of Starr Company in exchange for $1,125,000 fair-value consideration. The total fair value of Starr Company was assessed at $1,200,000. Harrison computed annual excess fair- value amortization of $8,000 based on the difference between Starr's total fair value and its underlying book value. The subsidiary reported net income of $70,000 in 2017 and $90,000 in 2018 with dividend declarations of $30,000 each year. Apart from its investment in Starr, Harrison had...
ProForm acquired 80 percent of ClipRite on June 30, 2017, for
$800,000 in cash. Based on ClipRite's acquisition-date fair value,
an unrecorded intangible of $500,000 was recognized and is being
amortized at the rate of $17,000 per year. No goodwill was
recognized in the acquisition. The noncontrolling interest fair
value was assessed at $200,000 at the acquisition date. The 2018
financial statements are as follows:
ProForm sold ClipRite
inventory costing $81,000 during the last six months of 2017 for
$210,000....
On January 1, 2017, Travers Company acquired 90 percent of Yarrow Company's outstanding stock for $945,000 The 10 percent noncontrolling interest had an assessed fair value of $105,000 on that date. Any acquisition-date excess fair value over book value was attributed to an unrecorded customer list developed by Yarrow with a emaining life of 15 years. On the same date, Yarrow acquired an 80 percent interest in Stookey Company for $544,000. At the acquisition date, the 20 percent noncontrolling interest...
On July 1, 2018, Truman Company acquired a 70 percent interest in Atlanta Company in exchange for consideration of $767,200 in cash and equity securities. The remaining 30 percent of Atlanta's shares traded closely near an average price that totaled $328,800 both before and after Truman's acquisition. In reviewing its acquisition, Truman assigned a $138,500 fair value to a patent recently developed by Atlanta, even though it was not recorded within the financial records of the subsidiary. This patent is...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $476,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $705,000 and the fair value of the 20 percent noncontrolling interest was $119,000. 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...
Protrade 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...
Most questions answered within 3 hours.
-
The denaturation of proteins can be described by the
equilibrium
F⇌U
where F and U represent...
asked 48 minutes ago -
Please answer what the maximum and minimum force is, and the
angle on the ion is...
asked 50 minutes ago -
implement a program that reads a number of rows and a symbol.
The program will draw...
asked 55 minutes ago -
Assume that when adults with smartphones are randomly selected,
45% use them in meetings or classes....
asked 59 minutes ago -
Determine the number of formula units of
Na2SO4 and moles of oxygen contained in 8.11
moles...
asked 1 hour ago -
Explain in steps on the following code
What would be the output when executed
using System;...
asked 1 hour ago -
Given the information in the table, which of the following
statements is CORRECT?
Stock A
Stock...
asked 1 hour ago -
Write MARIE assembly language programs that do the following:
Write a program that inputs an integer...
asked 1 hour ago -
Explain an understanding of services and protocols.
Explain the job of DNS.
Explain the three email...
asked 1 hour ago -
(As soon as possible) Balance each of the following equations
according to the half-reaction method:
H2O2(aq)...
asked 1 hour ago -
A thin rod with a mass of 3.5kg and a length L=1.5 m is oriented
horizontally....
asked 1 hour ago -
Inheritance pattern in BRCA 1
Describe the inheritance pattern of BRCA 1 Is it recessive or...
asked 1 hour ago