ProForm acquired 70 percent of ClipRite on June 30, 2017, for$910,000 in cash. Based on ClipRite's acquisition-date fair value,an unrecorded intangible of $400,000 was recognized and isbeing amortized at the rate of $10,000 per year. No goodwill wasrecognized in the acquisition.The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2018financial statements are as follows:ProFormClipRite$ (800,000) $ (600,000)400,000SalesCost of goods soldOperating expenses535,000100,000100,000Dividend income(35,000)$ (200,000) $ (100,000)-0-Net income$ (1,300,000) $ (850,000)(100,000)50,000Retained earnings, 1/1/18Net income(200,000)Dividends declared100,000Retained earnings, 12/31/18$ (1,400,000) $ (900,000)$ 400,000$ 300,000700,000Cash and receivablesInventory ....Investment in ClipRite.290,000910,000-0-Fixed assets1,000,000600,000Accumulated depreciation(300,000)$ 2,300,000(200,000)Totals$1,400,000$ (600,000) $ (400,000)(300,000)LiabilitiesCommon stock(100,000)Retained earnings, 12/31/18(1,400,000)$ (2,300,000) $(1,400,000)(900,000)TotalsProForm sold ClipRite inventory costing $72,000 during the lastsix months of 2017 for $120,000. At year-end, 30 percentremained. ProForm sells ClipRite inventory costing $200,000during 2018 for $250,000. At year-end, 10 percent is left. Withthese facts, determine the consolidated balances for thefollowing: Sales Cost of Goods Sold Operating ExpensesDividend Income Net Income Attributable to NoncontrollingInterest Inventory Noncontrolling Interest in Subsidiary, 12/31/18

Thus, the consolidated sales are $1,150,000. Compute the consolidated cost of goods sold: Thus, the…

ProForm acquired 70 percent of ClipRite on June 30, 2017, for $910,000 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 $10,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2018 financial statements are as follows: ProForm ClipRite $ (800,000) $ (600,000) 535,000 Sales Cost of goods sold Operating expenses 400,000 100,000 100,000 (35,000) $ (200,000) $ (100,000) $ (1,300,000) $ (850,000) (200,000) 100,000 Dividend income -0- Net income Retained earnings, 1/1/18 (100,000) 50,000 Net income Dividends declared Retained earnings, 12/31/18 $ (1,400,000) $ (900,000) Cash and receivables $ 400,000 $ 300,000 Inventory ..... Investment in ClipRite. 290,000 700,000 910,000 -0- Fixed assets 1,000,000 600,000 Accumulated depreciation (300,000) $ 2,300,000 $ 1,400,000 (200,000) Totals $ (600,000) $ (400,000) (300,000) (1,400,000) Liabilities Common stock (100,000) Retained earnings, 12/31/18 (900,000) Totals $ (2,300,000) $(1,400,000) ProForm sold ClipRite inventory costing $72,000 during the last six months of 2017 for $120,000. At year-end, 30 percent remained. ProForm sells ClipRite inventory costing $200,000 during 2018 for $250,000. At year-end, 10 percent is left. With these facts, determine the consolidated balances for the following: Sales Cost of Goods Sold Operating Expenses Dividend Income Net Income Attributable to Noncontrolling Interest Inventory Noncontrolling Interest in Subsidiary, 12/31/18

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 75P