Required information
SB On January 1, 20X8, Potter Corporation acquired...
On January 1, 20X8, Potter Corporation acquired 90 percent of
Shoemaker Company’s voting stock, at underlying book value. The
fair value of the noncontrolling interest was equal to 10 percent
of the book value of Shoemaker at that date. Potter uses the fully
adjusted equity method in accounting for its ownership of
Shoemaker. On December 31, 20X9, the trial balances of the two
companies are as follows:
Potter Company |
Shoemaker Corporation |
|||||||||||||
Debit |
Credit |
Debit |
Credit |
|||||||||||
Current Assets |
$ |
200,000 |
$ |
140,000 |
||||||||||
Depreciable Assets |
350,000 |
250,000 |
||||||||||||
Investment in Shoemaker Corp. |
162,000 |
|||||||||||||
Depreciation Expense |
27,000 |
10,000 |
||||||||||||
Other Expenses |
95,000 |
60,000 |
||||||||||||
Dividends Declared |
20,000 |
10,000 |
||||||||||||
Accumulated Depreciation |
$ |
118,000 |
$ |
80,000 |
||||||||||
Current Liabilities |
100,000 |
80,000 |
||||||||||||
Long-Term Debt |
100,000 |
50,000 |
||||||||||||
Common Stock |
100,000 |
50,000 |
||||||||||||
Retained Earnings |
150,000 |
100,000 |
||||||||||||
Sales |
250,000 |
110,000 |
||||||||||||
Income from Subsidiary |
36,000 |
|||||||||||||
$ |
854,000 |
$ |
854,000 |
$ |
470,000 |
$ |
470,000 |
|||||||
TB MC Qu. 03-22 Based on the preceding information, what...
Based on the preceding information, what amount would be reported as noncontrolling interest in the consolidated balance sheet at December 31, 20X9?
Potter | Shoemaker | |
Sales | 250,000 | 110,000 |
Other expenses | -95,000 | -60,000 |
Depreciation | -27,000 | -10,000 |
Net income | 128,000 | 40,000 |
Consolidated net income
= Net income of Potter + Potter share in Shoemaker
= 128,000 + (90%*40,000)
= 164,000
Required information SB On January 1, 20X8, Potter Corporation acquired... On January 1, 20X8, Potter Corporation...
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