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 2022 Net Income $ Dividends 120,000 49,000 $ 147,000 52,000 Assume the initial value method is applied. Compute the noncontrolling interest in Garcia at December 31, 2022.

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 2022 Net Income $ Dividends 120,000 49,000 $ 147,000 52,000 Assume the initial value method is applied. Compute the noncontrolling interest in Garcia at December 31, 2022.

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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On May 28, 2018, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc. for$420 million. The fair value of Harman’s identifiable tangible and intangible assets totaled $512 million, and thefair value of liabilities assumed by Pesky was $150 million.Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2018. Management has provided the following information:Fair value of Harman, Inc. $400 millionFair value of Harman’s net assets (excluding goodwill) 370 millionBook value of Harman’s net assets (including goodwill) 410 millionRequired:1. Determine the amount of goodwill that resulted from the Harman acquisition.2. Determine the amount of goodwill impairment loss that Pesky should recognize at the end of 2018, if any.3. If an impairment loss is required, prepare the journal entry to record the loss.
On March 31, 2021, JISOO Company purchased 32,000 shares of the 40,000 outstanding shares of ROSECompany at a price of P1,200,000 with an excess of P30,000 over the book value of ROSE Company’snet assets. P13,000 of the excess is attributed to an undervalued equipment with a remaining usefullife of 10 years from the date of acquisition and the rest of the amount is attributed to goodwill. Forthe year 2021, JISOO Company reported a net income of P750,000 and paid dividends of P180,000.While ROSE Company reported a net income of P240,000 which was evenly earned during the yearand paid dividends to JISOO Company amounting to P39,000. Goodwill was not impaired in 2021.The retained earnings of JISOO Company at the end of 2021 per books is P1,025,000. JISOO Companyuses the cost method to account for its investment in ROSE Company. Non-controlling interest ismeasured at fair market value. Requirement:Compute for the non-controlling interest in net assets on December 31, 2021.
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 100,000 40,000 Multiple Choice $780,000. $660,000. $785,000. $676,000. SO. $ 120,000 50,000 $ 130,000 60,000 Assume the partial equity method is applied. What is the consolidated balance of the Investment in Demers account at December 31, 2021.
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In 2018, Martin Corp. acquired Glynco and recorded goodwill of $45 million. Martin considers Glynco a separate reporting unit. By the end of 2021, the net assets (including goodwill) of Glynco are $320 million and its estimated fair value is $260 million. The amount of the impairment loss that Martin would record for goodwill at the end of 2021 is: A) $0. B) $60 million. C) $45 million. D) $15 million.
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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 5) What is the consolidated balance of the Investment in Demers account at December 31, 2021.
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 Net income $ 100,000 Dividends 40,000 2020 2021 $ 120,000 $ 130,000 50,000 60,000 Assume the initial value method is applied. Compute the noncontrolling interest in the net income of Demers at December 31, 2020. Multiple Choice $12,600. $18,400. ⚫ $22,600. $14,000. $24,000.
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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. 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…
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