Homework Answers
a) Calculation of Consolidated Net Income for 2018 (Amounts in $)
| Boulder's operating income | 379,200 |
| Rock's operating income | 131,200 |
| Stone's operating income | 194,000 |
| Amortization expense-Boulder's investment in Rock | (25,500) |
| Amortization expense-Rock's investment in Stone | (12,400) |
| Consolidated net income for 2018 | 666,500 |
b) Calculation of Controlling Interest in Consolidated Income (Amounts in $)
| Boulder's operating income | 379,200 |
| Boulder's share in Rock's operating income (131,200*90%) | 118,080 |
| Boulder's share in Stone's operating income (194,000*75%*90%) | 130,950 |
| Boulder's share in Rock's excess amortization (25,500*90%) | (22,950) |
| Boulder's share in Stone's excess amortization (12,400*75%*90%) | (8,370) |
| Controlling interest in consolidated net income | 596,910 |
Calculation of Non Controlling Interest in Consolidated Income (Amounts in $)
| Stone's operating income | 194,000 | |
| Amortization expense (on Rock's investment) | (12,400) | |
| Stone's accrual based net income | 181,600 | |
| Non Controlling share | 25% | |
| Non Controlling interest in Stone's income (181,600*25%) | 45,400 | |
| Rock's operating income | 131,200 | |
| Amortization expense (on boulder's investment) | (25,500) | |
| Share in Stone's income (75%*181,600) | 136,200 | |
| Rock's accrual based net income | 241,900 | |
| Non Controlling share | 10% | |
| Non Controlling interest in Rock's income (241,900*10%) | 24,190 | |
| Total Non Controlling interest in consolidated net income | 69,590 |
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Boulder, Inc., obtained 90 percent of Rock Corporation on January 1, 2016. Annual amortization of $25,500 is applicable...
Boulder, Inc., obtained 90 percent of Rock Corporation onJanuary 1, 2016. Annual amortization of $23,700...
Boulder, Inc., obtained 90 percent of Rock Corporation on
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the allocations of Rock's acquisition-date business fair value. On
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Required information On January 1, 2016, Pride Corporation purchased 90 percent of the outstanding voting shares...
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Boulder, Inc., obtained 90 percent of Rock Corporation on
January 1, 2016. Annual amortization of $23,700 is applicable on
the allocations of Rock's acquisition-date business fair value. On
January 1, 2017, Rock acquired 75 percent of Stone Company's voting
stock. Excess business fair-value amortization on this second
acquisition amounted to $10,200 per year. For 2018, each of the
three companies reported the following information accumulated by
its separate accounting system. Separate operating income figures
do not include any investment or...
Required information On January 1, 2016, Pride Corporation purchased 90 percent of the outstanding voting shares of Star, Inc. for $495,000 cash. The acquisition date fair value of the noncontrolling interest was $55,000. At January 1, 2016, Star's net assets had a total carrying amount of $385.000. Equipment (eight-year remaining life) was undervalued on Star's financial records by $69,600. Any remaining excess fair value over book value was attributed to a customer list developed by Star (four-year emaining life), but...
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...
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