On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $41,568. Calvin Co. has one recorded asset, a specialized production machine with a book value of $14,200 and no liabilities. The fair value of the machine is $59,200, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin's total acquisition date fair value is $69,280. At the end of the year, Calvin reports the following in its financial statements: Revenues Expenses Net income Dividends paid $ 68,250 26,400 $ 41,850 $5,000 Machine Other assets Total assets Noncontrolling interest in subsidiary income Total noncontrolling interest Calvin's machine (net accumulated depreciation) Process trade secret $ $ $ $ $ 12,780 38,270 $ 51,050 Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin's machine (net of accumulated depreciation), and the process trade secret. Amount Common stock Retained earnings Total equity 13,932✔ 39,644✔ 54,700 X 7,560 $ 14,200 36,850 $ 51,050

On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $41,568. Calvin Co. has one recorded asset, a specialized production machine with a book value of $14,200 and no liabilities. The fair value of the machine is $59,200, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin's total acquisition date fair value is $69,280. At the end of the year, Calvin reports the following in its financial statements: Revenues Expenses Net income Dividends paid $ 68,250 26,400 $ 41,850 $5,000 Machine Other assets Total assets Noncontrolling interest in subsidiary income Total noncontrolling interest Calvin's machine (net accumulated depreciation) Process trade secret $ $ $ $ $ 12,780 38,270 $ 51,050 Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin's machine (net of accumulated depreciation), and the process trade secret. Amount Common stock Retained earnings Total equity 13,932✔ 39,644✔ 54,700 X 7,560 $ 14,200 36,850 $ 51,050

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 62P

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