For ease, Johnsonville is denoted by J and Strayer company is denoted by J.
At acquisition date, fair value = $ 1,000,000
Remaining life of process = 20 years
Hence, amortization for 2015 = Fair value at acquisition date/Remaining life
= 1,000,000/20
= $ 50,000
Amount to be reported on consolidated financial statement = Fair value – Amortization for 2015
= $ 1,000,000 – 50,000
= $ 950,000
At acquisition date, fair value = $ 345,000
Remaining life = 10 years
Depreciation for 2015 = Fair value/Remaining life = 345,000/10 = $ 34,500
Amount to be reported for building in consolidated financial statement
= Fair value at acquisition date – depreciation for 2015
= 345,000 – 34,500
= $ 310,500
Particulars |
Details |
Amount ($) |
Reported earnings of enterprise J |
650,000 |
|
Reported earnings of S |
350,000 |
|
Less: Amortisation for tech process |
50,000 |
|
Adjustment for Building ( 345,000-195,000)/10 |
15,000 |
|
Adjusted earnings for S |
285,000 |
|
Share of J in S earnings (285,000-80%) |
80% |
228,000 |
Net income attributable to controlling interest ( 650,000 + 228,000) |
878,000 |
Particulars |
Details |
Amount ($) |
Reported earnings of S |
350,000 |
|
Less : Excess fair value amortization/depreciation |
||
Technology processes |
50,000 |
|
Adjustment for Building ( 345,000-195,000)/10 |
15,000 |
(65,000) |
Adjusted earnings for S |
285,000 |
|
Non-controlling interest |
20% |
|
Net income attributable to non-controlling interest (285,000*20%) |
57,000 |
Particulars |
Amount ($) |
Fair value of S on acquisition date ( 3,000,000/80%) |
3,750,000 |
Non-controlling interest |
20% |
Fair value of non-controlling interest on acquisition date |
750,000 |
Add: Non-controlling interest in S net income |
57,000 |
Less: non-controlling interest in S dividend ( 50,000 *20%) |
10,000 |
Non-controlling interest to be reported on December 31, 2015 |
$ 797,000 |
kindly upvote
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