ProForm acquired 60 percent of ClipRite on June 30, 2020, for $1,140,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $15,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $760,000 at the acquisition date. The 2021 financial statements are as follows: Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/21 Totals Sales Cost of Goods Sold ProForm $ (900,000) 585,000 200,000 (48,000) ClipRite $ (800,000) 450,000 150,000 0 $ (163,000) $ (200,000) $ Sales Cost of goods sold $(2,300,000) (163,000) 200,000 $(2,263,000) $ 500,000 390,000 1,140,000 2,000,000 Operating expenses Dividend income Net income attributable to noncontrolling interest Operating Expenses Dividend Income Net Income Attributable to Noncontrolling Interest Inventory Noncontrolling Interest in Subsidiary, 12/31/21 Inventory Noncontrolling interest in subsidiary, 12/31/21 (700,000) $ 3,330,000 $ (667,000) (400,000) (2,263,000) $(3,330,000) (Note: Parentheses indicate a credit balance.) ClipRite sold ProForm inventory costing $79,000 during the last six months of 2020 for $190,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $250,000 during 2021 for $350,000. At year-end, 10 percent is left. Determine the consolidated balances for the following: (Input all amounts as positive values.) X Answer is not complete. (950,000) (200,000) 80,000 $(1,070,000) 400,000 800,000 0 $ $ $ $ $ 1,100,000 (250,000) $ 2,050,000 $ (580,000) (400,000) (1,070,000) $(2,050,000) Consolidated Balance 1,350,000✔ 661,700 365,000 0 $ 1,180,000✔
ProForm acquired 60 percent of ClipRite on June 30, 2020, for $1,140,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $15,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $760,000 at the acquisition date. The 2021 financial statements are as follows: Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/21 Totals Sales Cost of Goods Sold ProForm $ (900,000) 585,000 200,000 (48,000) ClipRite $ (800,000) 450,000 150,000 0 $ (163,000) $ (200,000) $ Sales Cost of goods sold $(2,300,000) (163,000) 200,000 $(2,263,000) $ 500,000 390,000 1,140,000 2,000,000 Operating expenses Dividend income Net income attributable to noncontrolling interest Operating Expenses Dividend Income Net Income Attributable to Noncontrolling Interest Inventory Noncontrolling Interest in Subsidiary, 12/31/21 Inventory Noncontrolling interest in subsidiary, 12/31/21 (700,000) $ 3,330,000 $ (667,000) (400,000) (2,263,000) $(3,330,000) (Note: Parentheses indicate a credit balance.) ClipRite sold ProForm inventory costing $79,000 during the last six months of 2020 for $190,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $250,000 during 2021 for $350,000. At year-end, 10 percent is left. Determine the consolidated balances for the following: (Input all amounts as positive values.) X Answer is not complete. (950,000) (200,000) 80,000 $(1,070,000) 400,000 800,000 0 $ $ $ $ $ 1,100,000 (250,000) $ 2,050,000 $ (580,000) (400,000) (1,070,000) $(2,050,000) Consolidated Balance 1,350,000✔ 661,700 365,000 0 $ 1,180,000✔
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 62P
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Step 1: Define consolidated Income statement
VIEWStep 2: Working note for sales, cost of goods sold, operating expenses, and inventory
VIEWStep 3: Showing working note for Noncontrolling interest in subsidiary,12/31/21 (working Note 2)
VIEWStep 4: Calculation of Net Income attribute to noncontrolling interest
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