On January 1, 20X1, Payne Corp. purchased 70% of Shayne Corp.'s $10 par common stock for $900,000. On this date, the carrying amount of Shayne's net assets was $1,000,000. The fair values of Shayne's identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were $200,000 in excess of the carrying amount. For the year ended December 31, 20X1, Shayne had net income of $150,000 and paid cash dividends totaling $90,000. Excess attributable to plant assets is amortized over 10 years. In the December 31, 20X1, consolidated balance sheet, noncontrolling interest should be reported at ____. a. $282,714 b. $300,500 c. $397,714 d. $345,500

On January 1, 20X1, Payne Corp. purchased 70% of Shayne Corp.'s $10 par common stock for $900,000. On this date, the carrying amount of Shayne's net assets was $1,000,000. The fair values of Shayne's identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were $200,000 in excess of the carrying amount. For the year ended December 31, 20X1, Shayne had net income of $150,000 and paid cash dividends totaling $90,000. Excess attributable to plant assets is amortized over 10 years. In the December 31, 20X1, consolidated balance sheet, noncontrolling interest should be reported at ____. a. $282,714 b. $300,500 c. $397,714 d. $345,500

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 1MC

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On January 1, 20X1, Payne Corp. purchased 70% of Shayne Corp.'s $10 par common stock for $900,000. On this date, the carrying amount of Shayne's net assets was $1,000,000. The fair values of Shayne's identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were $200,000 in excess of the carrying amount. For the year ended December 31, 20X1, Shayne had net income of $150,000 and paid cash dividends totaling $90,000. Excess attributable to plant assets is amortized over 10 years. In the December 31, 20X1, consolidated balance sheet, noncontrolling interest should be reported at ____. Check Number – Excess of FV over BV = $285,714 a. $282,714 b. $300,500 c. $397,714 d. $345,500
On January 1, 20X1, Rabb Corp. purchased 80% of Sunny Corp.'s $10 par common stock for $975,000. On this date, the carrying amount of Sunny's net assets was $1,000,000. The fair values of Sunny's identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were $100,000 in excess of the carrying amount. In the January 1, 20X1, consolidated balance sheet, goodwill should be reported at ____. a. $0 b. $75,750 c. $95,000 d. $118,750
January 1, 20x4, Payne Corp. purchased 70% of Shayne Corp.’s P10 par common stock for P900,000. On this date, the carrying amount of Shayne ‘s net assets was P1,000,000. The fair values of Shayne’s identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net), which were P200,000 in excess of the carrying amount. For the year ended December 31, 20x4, Shayne had net income of P150,000 and paid cash dividends totaling P90,000. Excess attributable to plant assets is amortized over 10 years. In the December 31, 20x4 , consolidated balance sheet, non-controlling interest should be reported at
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On January 1, 20x1, ABC Corporation purchased all of XYZ Corporation's common stock for $1,200,000. On that date, the fair values of XYZ's assets and liabilities equaled their carrying amounts of $1,320,000 and $320,000, respectively. During year 1, XYZ paid cash dividends of $20,000. Selected information from the separate balance sheets and income statements of ABC and XYZ as of December 31, year 1, and for the year then ended follows: ABC Corporation (Column 1), XYZ Corporation (Column 2) REQUIRED: In ABC's December 31, year 1 consolidated balance sheet, what amount should be reported as total retained earnings?
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On January 1, year 1, ABC Corporation purchased 80% of XYZ Corporation's P10 par common stock for P975,000. On this date, the carrying amount of XYZ's net assets was P1,000,000. The fair values of XYZ's identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net) with fair values of P100,000 in excess of their carrying amount. The fair value of the noncontrolling interest in XYZ on January 1, year 1, was P250,000. For the year ended December 31, year 1, XYZ had net income of P190,000 and paid cash dividends totaling P125,000. a. In the January 1, year 1 consolidated balance sheet, goodwill should be reported at?b. In the December 31, year 1 consolidated balance sheet, noncontrolling interest should be reported at?
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Peel Corporation purchased 60 percent of Split Products Company's shares on December 31, 20X7, for $216,000. At that date, the fair value of the noncontrolling interest was $144,000. On January 1, 20X9, Peel purchased an additional 20 percent of Split's common stock for $97,000. Summarized balance sheets for Split on the dates indicated are as follows: Assets Cash Accounts Receivable Inventory Buildings & Equipment (net) Total Assets Liabilities & Equities Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilities & Equities 20X7 $ 49,000 51,000 72,000 370,000 $542,000 December 31 20X8 Balance in investment account $ 79,000 91,000 102,000 350,000 $622,000 20X9 $ 99,000 121,000 162,000 330,000 $712,000 $ 77,000 $127,000 $167,000 105,000 105,000 105,000 155,000 155,000 155,000 205,000 235,000 285,000 $542,000 $622,000 $712,000 Split paid dividends of $22,000 in each of the three years. Peel uses the equity method in accounting for its investment in Split and…
On January 1, Year 1, Papa Inc. acquired 80% of the outstanding voting shares of Sonny Inc. for total consideration of $1,200,000. On this date, Sonny reported total assets of $1,800,000 and total liabilities of $800,000. All assets and liabilities had FVs equal to carrying values except for the following: Inventory-Carrying value of $150,000 but the fair value is $170,000; and Patent-Carrying value of $130,000 but the fair value is $150,000 The patent had a remaining useful life of 10 years as of the date of acquisition. On December 31, Year 3, Papa and Sonny reported $200,000 and $150,000, respectively, for patent on the separate- entity financial statements. What amount would be reported for patent on the consolidated financial statements as at December 31, Year 3? O a. $368,000 O b. $364,000 O c. $336,000 O d. $350,000
On 1/1/19, Major Company purchased 10% of Minor Company's common stock for $100,000. Minor's book value of equity at that date consisted of $200,000 common stock and $450,000 retained earnings. On 1/1/19, the difference between the fair value and book value of equity of Minor's stock is attributable to land for $100,000 and the remaining difference is attributable to equipment. The equipment has a 10 year remaining life at 1/1/19. During 2019, Minor reported income of $150,000 and paid dividends of $50,000. The fair value of Major’s investment in Minor stock on 12/31/19 is $125,000. Assuming that Major is investing in Minor because it has excess cash and thinks Minor stock price prospects are good, answer the following questions (use the $XXX,XXX) format. The investment will be sold within a month after year-end. Round to the nearest dollar. The total asset amount related to the Investment in Minor on Major’s 12/31/2019 balance sheet is ________ The Minor investment increased…
On January 1, 20x1, ALLEVIATE Co. acquired 30,000 ordinary shares representing 30% interest in LESSEN Co.'s net assets for $12,000,000. At the time of acquisition, LESSEN's net assets had a fair value of $40,000,000 and a carrying amount of $32,000,000. The difference between the fair value and the carrying amount is attributable to a building which has a remaining useful life of 10 years. In 20x1, LESSEN reported profit of $4,000,000 and paid cash dividends of $2,400,000. LESSEN's shares were selling at $400 per share on December 31, 20x1. On July 1, 20x2, ALLEVIATE sold 60% of its investment in LESSEN at the prevailing market price of $480 per share. The retained interest does not give ALLEVIATE significant influence over LESSES; thus, ALLEVIATE reclassified the remaining investment to held for trading securities. LESSEN reported interim profit of $2,000,000 for the six months ended June 30, 20x2. LESSEN reported total profit of $4,800,000 in 20x2 and declared $4,000,000 cash…