Homework Answers
a.
Controlling Noncontrolling
Interest Interest
Fair value at acquisition date $1,710,000 $190,000
Relative fair values of identifiable net assets
90% and 10% of $1,525,000 (acquisition date
recorded fair value plus customer base) 1,372,500 152,500
Goodwill $337,500 $37,500
b.
If the acquisition-date fair value of the noncontrolling interest was $167,500, both goodwill (NCI portion) and the noncontrolling interest balance would be reduced equally by $22,500 as follows:
Fair value of San Marco Company (1,710,000 + 167,500) $1,877,500
Carrying amount acquired 725,000
Excess fair value 1,152,500
to customer base 800,000
to goodwill $352,500
Noncontrolling interest balance beginning of year* $(172,500)
Net income attributable to noncontrolling interest (13,500)
Dividends declared to noncontrolling interest 2,500
Noncontrolling interest end of year $(183,500)
* NCI at beginning of year
Common stock-subsidiary $400,000
APIC-subsidiary 60,000
Retained earnings-subsidiary 1/1 395,000
Total $855,000
Noncontrolling interest percentage 10%
Noncontrolling share of subsidiary book value 85,500
Noncontrolling share of 1/1 customer base excess 72,000
Noncontrolling share of goodwill (below) 15,000
Noncontrolling interest 1/1 $172,500
Controlling Noncontrolling
Interest Interest
Fair value at acquisition date $1,710,000 $167,500
Relative fair values of identifiable net assets
90% and 10% of $1,525,000 (acquisition date
recorded fair value plus customer base) 1,372,500 152,500
Goodwill $ 337,500 $ 15,000
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On January 1, 2020, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting...
On January 1, 2017, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting...
On January 1, 2017, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting stock of San Marco Company. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2017, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners' equity amounts in its balance sheet Common stock Additional paid-in capital Retained earnings $400,000 60,000 265,000 In determining its acquisition offer, Paloma noted that the values for...
37. On January 1, 2017. Paloma Corporation exchanged $1.710.000 cash for 90 percent of the cut-...
37. On January 1, 2017. Paloma Corporation exchanged $1.710.000 cash for 90 percent of the cut- standing voting stock of San Marco Company. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2017, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners' equity amounts in its balance sheet: Common stock .... $400.000 Additional paid-in capital........ 60.000 Retained earnings. 265,000 In determining its acquisition offer, Paloma noted that...
On January 1, 2016, Parflex Corporation exchanged $344,000 cash for 90 percent of Eagle Corporation’s outstanding...
On January 1, 2016, Parflex Corporation exchanged $344,000 cash
for 90 percent of Eagle Corporation’s outstanding voting stock.
Eagle’s acquisition date balance sheet follows:
Cash and receivables
$
15,000
Liabilities
$
76,000
Inventory
35,000
Common stock
150,000
Property and equipment (net)
350,000
Retained earnings
174,000
$
400,000
$
400,000
On January 1, 2016, Parflex prepared the following fair-value
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10% noncontrolling interest fair value
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On January 1, Patterson Corporation acquired 80 percent of the 100,000 outstanding voting shares of Soriano, Inc., in exchange for $31.25 per share cash. The remaining 20 percent of Soriano's shares continued to trade for $30 both before and after Patterson's acquisition At January 1, Soriano's book and fair values were as follows: Remaining Life Current assets Buildings and equipment Trademarks Patented technology Values $ 80,000 1,000,000 900,000 2,000,000 5 years 10 years 4 years Book Values 80,000 1,250,000 700,000...
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On January 1, 2017, Pinnacle Corporation exchanged $3,608,000 cash for 100 percent of the outstanding voting stock of Strata Corporation. On the acquisition date, Strata had the following balance sheet: Cash $ 159,000 Accounts payable $ 376,000 Accounts receivable 308,000 Long-term debt 2,760,000 Inventory 434,000 Common stock 1,500,000 Buildings (net) 2,000,000 Retained earnings 1,465,000 Licensing agreements 3,200,000 $ 6,101,000 $ 6,101,000 Pinnacle prepared the following fair-value allocation: Fair value of Strata (consideration transferred) $ 3,608,000 Carrying amount acquired 2,965,000 Excess...
On January 1, 2017, Doone Corporation acquired 80 percent of the outstanding voting stock of Rockne...
On January 1, 2017, Doone Corporation acquired 80 percent of the outstanding voting stock of Rockne Company for $640,000 consideration. At the acquisition date, the fair value of the 20 percent noncontrolling interest was $160,000 and Rockne's assets and abilities had a collective net fair value of $800,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $290,000 in 2018. Since being acquired, Rockne has regularly supplied inventory...
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 $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 $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...
On January 1, 2020, Prestige Corporation acquired 100 percent of the voting stock of Stylene Corporation...
On January 1, 2020, Prestige Corporation acquired 100 percent of the voting stock of Stylene Corporation in exchange for $2,244,000 in cash and securities. On the acquisition date, Stylene had the following balance sheet: Accounts payable $ 1,799,000 Cash Accounts receivable Inventory Equipment (net) Trademarks Total assets $ 23,000 125,000 181,000 2,180,000 890,000 $ 3,399,000 Common stock 800,000 Retained earnings 800,000 Total liabilities and equity $ 3,399,000 At the acquisition date, the book values of Stylene's assets and liabilities were...
On January 1, 2017, Paloma Corporation exchanged $1,710,000 cash for 90 percent of the outstanding voting stock of San Marco Company. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2017, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners' equity amounts in its balance sheet Common stock Additional paid-in capital Retained earnings $400,000 60,000 265,000 In determining its acquisition offer, Paloma noted that the values for...
37. On January 1, 2017. Paloma Corporation exchanged $1.710.000 cash for 90 percent of the cut- standing voting stock of San Marco Company. The consideration transferred by Paloma provided a reasonable basis for assessing the total January 1, 2017, fair value of San Marco Company. At the acquisition date, San Marco reported the following owners' equity amounts in its balance sheet: Common stock .... $400.000 Additional paid-in capital........ 60.000 Retained earnings. 265,000 In determining its acquisition offer, Paloma noted that...
On January 1, 2016, Parflex Corporation exchanged $344,000 cash
for 90 percent of Eagle Corporation’s outstanding voting stock.
Eagle’s acquisition date balance sheet follows:
Cash and receivables
$
15,000
Liabilities
$
76,000
Inventory
35,000
Common stock
150,000
Property and equipment (net)
350,000
Retained earnings
174,000
$
400,000
$
400,000
On January 1, 2016, Parflex prepared the following fair-value
allocation schedule:
Consideration transferred by Parflex
$
344,000
10% noncontrolling interest fair value
36,000
Fair value of Eagle
380,000
Book value of...
On January 1, Patterson Corporation acquired 80 percent of the 100,000 outstanding voting shares of Soriano, Inc., in exchange for $31.25 per share cash. The remaining 20 percent of Soriano's shares continued to trade for $30 both before and after Patterson's acquisition At January 1, Soriano's book and fair values were as follows: Remaining Life Current assets Buildings and equipment Trademarks Patented technology Values $ 80,000 1,000,000 900,000 2,000,000 5 years 10 years 4 years Book Values 80,000 1,250,000 700,000...
On January 1, 2017, Doone Corporation acquired 80 percent of the outstanding voting stock of Rockne Company for $640,000 consideration. At the acquisition date, the fair value of the 20 percent noncontrolling interest was $160,000 and Rockne's assets and abilities had a collective net fair value of $800,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $290,000 in 2018. Since being acquired, Rockne has regularly supplied inventory...
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, 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...
On January 1, 2020, Prestige Corporation acquired 100 percent of the voting stock of Stylene Corporation in exchange for $2,244,000 in cash and securities. On the acquisition date, Stylene had the following balance sheet: Accounts payable $ 1,799,000 Cash Accounts receivable Inventory Equipment (net) Trademarks Total assets $ 23,000 125,000 181,000 2,180,000 890,000 $ 3,399,000 Common stock 800,000 Retained earnings 800,000 Total liabilities and equity $ 3,399,000 At the acquisition date, the book values of Stylene's assets and liabilities were...
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