Paul Company acquired 60% of Smith Company for $480,000 on January 1, 2019. On that date the remaining 40% of Smith’s shares had a fair value of $320,000; and Smith’s balance sheet showed $310,000 of contributed capital and $240,000 of retained earnings. At that time, Smith’s equipment was overvalued by $40,000 and buildings were undervalued by $90,000, both having a 10-year remaining life. Any excess consideration transferred over the fair value of Smith’s net assets was attributed to goodwill. Smith reported net income of $170,000 and dividends declared of $70,000 for the year 2020 and retained earnings of $320,000 at the beginning of 2020. Paul’s operating income of 2020 was $480,000. At the end of 2020, the Equipment (net) account in Paul’s and Smith’s books were $260,000 and 132,000, respectively. Required: Assume Paul uses the partial equity method. Calculate the following: 1. Goodwill, 12/31/20: ____________ 2. Paul’s net income, 2020: ____________ 3. Consolidated net income, 2020: _________

Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $342,000 in cash. The subsidiary's stockholders' equity accounts totaled $326,000, and the noncontrolling interest had a fair value of $38,000 on that day. However, a building (with a nine-year remaining life) in Brey's accounting records was undervalued by $18,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (six-year remaining life).   Brey reported net income from its own operations of $64,000 in 2019 and $80,000 in 2020. Brey declared dividends of $19,000 in 2019 and $23,000 in 2020.   Brey sells inventory to Pitino as follows:   Year Cost to Brey Transfer Price to Pitino Inventory Remaining at Year-End (at transfer price) 2019 $ 69,000   $ 115,000   $ 25,000   2020   81,000     135,000     37,500   2021   92,800     160,000     50,000       At December 31, 2021, Pitino owes Brey $16,000 for inventory acquired during the…

Pitino acquired 90 percent of Brey's outstanding shares on January 1, 2019, in exchange for $351,000 in cash. The subsidiary's stockholders' equity accounts totaled $335,000, and the noncontrolling interest had a fair value of $39,000 on that day. However, a building (with a ten-year remaining life) in Brey's accounting records was undervalued by $15,000. Pitino assigned the rest of the excess fair value over book value to Brey's patented technology (four-year remaining life).   Brey reported net income from its own operations of $65,000 in 2019 and $81,000 in 2020. Brey declared dividends of $19,500 in 2019 and $23,500 in 2020.   Brey sells inventory to Pitino as follows:   Year Cost to Brey Transfer Price to Pitino Inventory Remaining at Year-End (at transfer price) 2019 $ 70,000   $ 120,000   $ 26,000   2020   77,000     140,000     38,000   2021   99,000     165,000     40,000       At December 31, 2021, Pitino owes Brey $17,000 for inventory acquired during the…

The DeBlois Family Co. acquired 40% of Orange Beach Co. with a $500,000 payment on January 1, 2023. The equivalent net book value (40% share) of Orange Beach on the date of acquisition was $425,000. $50,000 of the excess payment was attributable to equipment with a 10-year remaining life. The remainder of the excess payment was not attributable to any identifiable item. Orange Beach Co. Reported net income of $40,000 in 2023. No dividends were paid out. On January 1, 2024, DeBlois Family Co. Acquired an additional 50% ownership share in Orange Beach Co. With a cash payment of $700,000. The fair value of the noncontrolling interest was determined to be $140,000 on the date of acquisition. The total fair value of Orange Beach's identifiable assets and liabilities on January 1, 2024, was $1,000,000. The trading value of stock shares remained the same as acquisition date prices for several months after January 1, 2024. What amount should be reported as consolidated goodwill on January 1,…