Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported c stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $3 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess conside transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 2020 2021 Net income $ Dividends 100,000 40,000 $ 120,000 50,000 $ 130,000 60,000

Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported c stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $3 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess conside transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 2020 2021 Net income $ Dividends 100,000 40,000 $ 120,000 50,000 $ 130,000 60,000

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

Chapter12: Intangibles

Section: Chapter Questions

Problem 19E

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Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 2020 2021 Net income $ 100,000 $ 120,000 $ 130,000 Dividends 40,000 50,000 60,000 Assume the equity method is applied. What is the consolidated balance of the Equity in Demers Earnings account at December 31, 2021. Multiple Choice $0. $98,400. $104,000. $97,000. $56,000.
Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 2020 2021 Net income $ 100,000 $ 120,000 $ 130,000 Dividends 40,000 50,000 60,000 Assume the equity method is applied. 1) Compute Pell's Investment in Demers account balance at December 31, 2019, 2020 and 2021. 2) Compute Pell's equity income from Demers for the year ended December 31, 2019, 2020 and 2021. 3) Compute the noncontrolling interest in the net income of Demers at December 31, 2019, 2020 and 2021. 4) Compute the noncontrolling interest in Demers at December 31, 2019, 2020 and…
Pell Company acquires 80% of Demers Company for $500,000 on January 1, 2019. Demers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Demers earns income and pays dividends as follows: 2019 2020 2021 $ Net income $ Dividends a. $112,000. b. Assume the equity method is applied. Compute the noncontrolling interest in Demers at December 31, 2019. $135,600. C. $118,600. d. $137,000. e. 100,000 40,000 $100,000. 120,000 50,000 $ 130,000 60,000
Lee Company acquired 75% of Winters Company for $600,000 on January 1, 2020. Winters reported common stock of $350,000 and retained earnings of $220,000 on that date. Equipment was overvalued by $10,000 and buildings were undervalued by $60,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. According to an annual review, goodwill has not been impaired. Winters earns income and pays dividends as follows: 2021 2022 $220,000 $245,000 90,000 110,000 Net income Dividends 2020 $150,000 65,000 Assume the partial equity method is applied. Compute the noncontrolling interest in Winters at December 31, 2021.
Ryan Company acquired 70% of Garcia Company for $475,000 on January 1, 2021. Garcia reported common stock of $250,000 and retained earnings of $180,000 on that date. Equipment was undervalued by $12,000 and buildings were undervalued by $50,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. According to an annual review, goodwill has not been impaired. Garcia earns income and pays dividends as follows: 2021 Net income $ Dividends 120,000 49,000 2022 S 147,000 52,000 Assume the initial value method is applied. Compute the noncontrolling interest in Garcia at December 31, 2022.