Question

ProForm acquired 80 percent of ClipRite on June 30, 2017, for $1,040,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $650,000 was recognized and is being amortized at the rate of $20,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $260,000 at the acquisition date. The 2018 financial statements are as follows: $ ClipRite (900, 000) 475,000 175,000 Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/18 Net income Dividends declared Retained earnings, 12/31/18 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Comon stock Retained earnings, 12/31/18 Totals ProForm $ (950,000) 610,000 250,000 (56, 000) $ (146,000) $(2,400,000) (146,000) 250,000 $(2, 296, 000) $ 550,000 440,000 1,040,000 1,700,000 (600,000) $ 3, 130,000 $ (634, 000) (200,000) (2, 296, 000) $(3, 130, 000) $ (250, 000) $(1,000,000) (250, 000) 70,000 $(1, 180, 000) $ 450,000 850,000 1,350,000 (300, 000) $ 2, 350,000 $ (970, 000) (200,000) (1, 180, 000) $(2, 350, 000) ProForm sold ClipRite inventory costing $84,000 during the last six months of 2017 for $240,000. At year-end, 30 percent remained ProForm sells ClipRite inventory costing $275,000 during 2018 for $400,000. At year-end, 10 percent is left. Determine the consolidated balances for the following accounts:

Answer 1

99999999999 - Glulation of Consolidated Şalese- Consolidated Sales= sales of Proform + Sales of Cliprate >> 950,000+ 900,000 – 400000 a Consolidated ->$1450000 3 Cost of goods sold > Cost of goods sold of Proform t cost of goods sold of Cliprate- Intra Entity Transfer 2018 - Realised Grow Profit 2017 + Deferred Grow Profit 2018. >> 610,000 + 475,000 – 400,000 – ((240,000 - 84,000)# 30%) + (400,000 - a 45,000) X107) . => 610,000 +495,000.–400,000 – 46800 +12,500 Consolidated Cost of goods sold $650,700 © Consolidated operating escepenses 6– - operating expenses of Proform + operating experies of lipite +Annualamoritisation -> 2 50,000+ 175000+ 20,000 $445,000 Dividend Income is to be considered as ou due cause dindiend is paid by subsidiary during consolidation.

ncontrolling interests ③ Net income attributable to non controlling inte ->(Net invorne of company Proforum + Not income o7. elepeate tunamorbisedesperse) x % - → (146,000 +950,000+ o) x 11061-80°4) non fosest u => 396,000 + 20% =>$79,200 | © Amount of consolidated inventory I nuentory of Proform + Inventory of el of Proform + Inventory of clipeute - unrealid do profito 2017 (2013 = 440,000 +850.000 – 46,800 – 18,500 $1930700 Non controlling interest in subsidiary, 12/31/189- T ourist of the fair value at the time olaquintion=$ 60,000 Aldt Goodwill Add t Income attributed to the non controlling = $50,000 equity interest (@50,000 Xbox dow) Non controlli vg interest share of = $70,000) dindenda (70,000) Non controlling interest in subsidiares 12/21/18 340,000

consolidated Balances Sales ② cost of goods sold ③ operating expenses ① Dindend income 1450000 650,700 445,000 79,200 © I Met income attributable to non controlling interat ® Inventory Non controlling interest in subsidiaries, 12/31/18 1230700 240,000