On January 1, 2012, Aspen Company acquired 80 percent of Birch Company’s outstanding voting stock for...
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On January 1, 2012, Aspen Company acquired 80 percent of Birch Company’s outstanding voting stock for $288,000. Birch reported a $300,000 book value and the fair value of the noncontrolling interest was $72,000 on that date. Also, on January 1, 2013, Birch acquired 80 percent of Cedar Company for $104,000 when Cedar had a $100,000 book value and the 20 percent noncontrolling interest was valued at $26,000. In each acquisition, the subsidiary’s excess acquisition-date fair over book value was assigned to a trade name with a 30-year life. |
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These companies report the following financial information. Investment income figures are not included. |
| 2012 | 2013 | 2014 | ||||
| Sales: | ||||||
| Aspen Company | $ 415,000 | $ | 545,000 | $ | 688,000 | |
| Birch Company | 200,000 | 280,000 | 400,000 | |||
| Cedar Company | Not available | 160,000 | 210,000 | |||
| Expenses: | ||||||
| Aspen Company | $ 310,000 | $ | 420,000 | $ | 510,000 | |
| Birch Company | 160,000 | 220,000 | 335,000 | |||
| Cedar Company | Not available | 150,000 | 180,000 | |||
| Dividends declared: | ||||||
| Aspen Company | $ 20,000 | $ | 40,000 | $ | 50,000 | |
| Birch Company | 10,000 | 20,000 | 20,000 | |||
| Cedar Company | Not available | 2,000 | 10,000 | |||
| Assume that each of the following questions is independent: |
| a. | If all companies use the equity method for internal reporting purposes, what is the December 31, 2013, balance in Aspen's Investment in Birch Company account? |
| b. | What is the consolidated net income for this business combination for 2014? |
| c. | What is the net income attributable to the noncontrolling interest in 2014? |
| d. | Assume that Birch made intra-entity inventory transfers to Aspen that have resulted in the following unrealized gross profits at the end of each year: |
| Date | Amount |
| 12/31/12 | $10,000 |
| 12/31/13 | 16,000 |
| 12/31/14 | 25,000 |
|
What is the realized income of Birch in 2013 and 2014, respectively? |
Homework Answers
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On January 1, 2012, Aspen Company acquired 80 percent of Birch
Company’s outstanding voting stock for...
On January 1, 2016, Aspen Company acquired 80 percent of Birch Company's voting stock for $288,000. Birch reported a $300,000 book value and the fair value of the noncontrolling interest was $72,000 on that date. Then, on January 1, 2017, Birch acquired 8
On January 1, 2016, Aspen Company acquired 80 percent of Birch Company's voting stock for $288,000. Birch reported a $300,000 book value and the fair value of the noncontrolling interest was $72,000 on that date. Then, on January 1, 2017, Birch acquired 80 percent of Cedar Company for $104,000 when Cedar had a $100,000 book value and the 20 percent noncontrolling interest was valued at $26,000. In each acquisition, the subsidiary's excess acquisition-date fair over book value was assigned to...
On January 1, 2016, Aspen Company acquired 80 percent of Birch Company's voting stock for $364,000....
On January 1, 2016, Aspen Company acquired 80 percent of Birch
Company's voting stock for $364,000. Birch reported a $320,000 book
value and the fair value of the noncontrolling interest was $91,000
on that date. Then, on January 1, 2017, Birch acquired 80 percent
of Cedar Company for $108,000 when Cedar had a $108,000 book value
and the 20 percent noncontrolling interest was valued at $27,000.
In each acquisition, the subsidiary's excess acquisition-date fair
over book value was assigned to...
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, 2020, 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...
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...
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 $412,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $545,000 and the fair value of the 20 percent noncontrolling interest was $103,000. 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...
Please help me solve this. Protrade Corporation acquired 80 percent of the outstanding voting stock of...
Please help me solve this.
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2014, for $484,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $725,000 and the fair value of the 20 percent noncontrolling interest was $121,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the individual...
On January 1, 2016, Aspen Company acquired 80 percent of Birch
Company's voting stock for $364,000. Birch reported a $320,000 book
value and the fair value of the noncontrolling interest was $91,000
on that date. Then, on January 1, 2017, Birch acquired 80 percent
of Cedar Company for $108,000 when Cedar had a $108,000 book value
and the 20 percent noncontrolling interest was valued at $27,000.
In each acquisition, the subsidiary's excess acquisition-date fair
over book value was assigned to...
Protrade Corporation acquired 80 percent of the outstanding
voting stock of Seacraft Company on January 1, 2020, 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...
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...
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...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $412,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $545,000 and the fair value of the 20 percent noncontrolling interest was $103,000. 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...
Please help me solve this.
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2014, for $484,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $725,000 and the fair value of the 20 percent noncontrolling interest was $121,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the individual...
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