On January 1, 2012, Aspen Company acquired 80 percent of Birch Company's outstanding voting stock for $438,000. Birch reported a $457,500 book value and the fair value of the noncontrolling interest was $109,500 on that date. Also, on January 1, 2013, Birch acquired 80 percent of Cedar Company for $200,000 when Cedar had a $205,000 book value and the 20 percent noncontrolling interest was valued at $50,000. In each acquisition, the subsidiary's excess acquisition-date fair over book value was assigned to a trade name with a 30-year life. These companies report the following financial information. Investment income figures are not included. Sales: Aspen Company Birch Company Cedar Company Expenses: Aspen Company Birch Company Cedar Company Dividends declared: Aspen Company Birch Company Cedar Company 2012 2013 2014 $632,500 $747,500 $822,500 416,900 261,250 327,250 Not available 185,900 292,600 $542,500 $522,500 $750,000 261,000 335,000 171,000 250,000 200,000 Not available $15,000 8,000 Not available $45,000 $ 55,000 15,000 6,000 15,000 2,000 Assume that each of the following questions is independent:

FINANCIAL ACCOUNTING
10th Edition
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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On January 1, 2012, Aspen Company acquired 80 percent of Birch Company's outstanding voting stock
for $438,000. Birch reported a $457,500 book value and the fair value of the noncontrolling interest was
$109,500 on that date. Also, on January 1, 2013, Birch acquired 80 percent of Cedar Company for
$200,000 when Cedar had a $205,000 book value and the 20 percent noncontrolling interest was
valued at $50,000. In each acquisition, the subsidiary's excess acquisition-date fair over book value
was assigned to a trade name with a 30-year life.
These companies report the following financial information. Investment income figures are not
included.
Sales:
Aspen Company
Birch Company
Cedar Company
Expenses:
Aspen Company
Birch Company
Cedar Company
Dividends declared:
Aspen Company
Birch Company
Cedar Company
2012
$ 632,500
261,250
Not available
$ 542,500
200,000
Not available
$15,000
8,000
Not available
2013
2014
$747,500
327,250
$822,500
416,900
185,900 292,600
$522,500 $750,000
261,000 335,000
171,000 250,000
$45,000 $ 55,000
15,000
15,000
2,000
6,000
Assume that each of the following questions is independent:
Transcribed Image Text:On January 1, 2012, Aspen Company acquired 80 percent of Birch Company's outstanding voting stock for $438,000. Birch reported a $457,500 book value and the fair value of the noncontrolling interest was $109,500 on that date. Also, on January 1, 2013, Birch acquired 80 percent of Cedar Company for $200,000 when Cedar had a $205,000 book value and the 20 percent noncontrolling interest was valued at $50,000. In each acquisition, the subsidiary's excess acquisition-date fair over book value was assigned to a trade name with a 30-year life. These companies report the following financial information. Investment income figures are not included. Sales: Aspen Company Birch Company Cedar Company Expenses: Aspen Company Birch Company Cedar Company Dividends declared: Aspen Company Birch Company Cedar Company 2012 $ 632,500 261,250 Not available $ 542,500 200,000 Not available $15,000 8,000 Not available 2013 2014 $747,500 327,250 $822,500 416,900 185,900 292,600 $522,500 $750,000 261,000 335,000 171,000 250,000 $45,000 $ 55,000 15,000 15,000 2,000 6,000 Assume that each of the following questions is independent:
c. What is the net income attributable to the noncontrolling interest in 2014?
Noncontrolling interests' share of the consolidated net
income
d. Assume that Birch made intra-entity inventory transfers to Aspen that have resulted in the following
unrealized gross profits at the end of each year:
Date
Amount
12/31/12 $16,600
12/31/13
12/31/14
23,600
33,200
What is the realized income of Birch in 2013 and 2014, respectively?
Realized income
2013
2014
Transcribed Image Text:c. What is the net income attributable to the noncontrolling interest in 2014? Noncontrolling interests' share of the consolidated net income d. Assume that Birch made intra-entity inventory transfers to Aspen that have resulted in the following unrealized gross profits at the end of each year: Date Amount 12/31/12 $16,600 12/31/13 12/31/14 23,600 33,200 What is the realized income of Birch in 2013 and 2014, respectively? Realized income 2013 2014
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