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 $70,320. Calvin Co. has one recorded asset, a specialized production machine with a book value of $17,700 and no liabilities. The fair value of the machine is $106,200, 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 $117,200.

 

At the end of the year, Calvin reports the following in its financial statements:

 

                       
Revenues $ 56,700   Machine $ 15,930   Common stock $ 17,700  
Expenses   21,750   Other assets   31,720   Retained earnings   29,950  
Net income $ 34,950   Total assets $ 47,650   Total equity $ 47,650  
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.

 

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