FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $36,000. Calvin Co. has one
recorded asset, a specialized production machine with a book value of $10,000 and no liabilities. The fair value of
the machine is $50,000, 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 $60,000.
At the end of the year, Calvin reports the following in its financial statements:
$ 50,000
20,000
$ 30,000
$ 9,000
26,000
$ 10,000
25,000
$ 35,000
Revenues
Machine
Common stock
Expenses
Other assets
Retained earnings
Net income
Total assets
$ 35,000
Total equity
Dividends paid
$ 5,000
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
Noncontrolling interest in subsidiary income
Total noncontrolling interest
Calvin's machine (net accumulated depreciation)
Process trade secret
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Transcribed Image Text:On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $36,000. Calvin Co. has one recorded asset, a specialized production machine with a book value of $10,000 and no liabilities. The fair value of the machine is $50,000, 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 $60,000. At the end of the year, Calvin reports the following in its financial statements: $ 50,000 20,000 $ 30,000 $ 9,000 26,000 $ 10,000 25,000 $ 35,000 Revenues Machine Common stock Expenses Other assets Retained earnings Net income Total assets $ 35,000 Total equity Dividends paid $ 5,000 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 Noncontrolling interest in subsidiary income Total noncontrolling interest Calvin's machine (net accumulated depreciation) Process trade secret
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