Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Chapter 5, Problem 28P
To determine
Determine balances for the following items:
- Sales
- Cost of Goods Sold
- Operating Expenses
- Dividend income
- Net Income Attributable to Non-controlling Interest
- Inventory
- Non-controlling Interest in Subsidiary, 12/31/18
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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)
400,000
Sales
Cost of goods sold
Operating expenses
535,000
100,000
100,000
Dividend income
(35,000)
$ (200,000) $ (100,000)
-0-
Net income
$ (1,300,000) $ (850,000)
(100,000)
50,000
Retained earnings, 1/1/18
Net income
(200,000)
Dividends declared
100,000
Retained earnings, 12/31/18
$ (1,400,000) $ (900,000)
$ 400,000
$ 300,000
700,000
Cash and receivables
Inventory ....
Investment in ClipRite.
290,000
910,000
-0-
Fixed assets
1,000,000
600,000
Accumulated depreciation
(300,000)
$ 2,300,000
(200,000)
Totals
$1,400,000
$ (600,000) $…
ProForm acquired 70 percent of ClipRite on June 30, 2017, for $910,000 in cash. Based on Clip- Rite’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 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:SalesCost of Goods SoldOperating ExpensesDividend IncomeNet Income Attributable to Noncontrolling InterestInventoryNoncontrolling Interest in Subsidiary, 12/31/18
ProForm acquired 70 percent of ClipRite on June 30, 2020, 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 2021 financial statements are as follows:
ProForm
ClipRite
Sales
$
(800,000
)
$
(600,000
)
Cost of goods sold
535,000
400,000
Operating expenses
100,000
100,000
Dividend income
(35,000
)
0
Net income
$
(200,000
)
$
(100,000
)
Retained earnings, 1/1/21
$
(1,300,000
)
$
(850,000
)
Net income
(200,000
)
(100,000
)
Dividends declared
100,000
50,000
Retained earnings, 12/31/21
$
(1,400,000
)
$
(900,000
)
Cash and receivables
$
400,000
$
300,000
Inventory
290,000
700,000
Investment in ClipRite
910,000
0…
Chapter 5 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
Ch. 5 - Prob. 1QCh. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - James, Inc., sells inventory to Matthews Company,...Ch. 5 - Prob. 6QCh. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Use the same information as in problem (5) except...Ch. 5 - Angela, Inc., holds a 90 percent interest in Corby...Ch. 5 - Prob. 8PCh. 5 - Thomson Corporation owns 70 percent of the...Ch. 5 - Prob. 10PCh. 5 - What is the total of consolidated cost of goods...Ch. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - What is the consolidated total for inventory at...Ch. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Akron, Inc., owns all outstanding stock of Toledo...Ch. 5 - Prob. 22PCh. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Following are financial statements for Moore...Ch. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 1DYSCh. 5 - Hamilton Hawks Players Association and Mr....
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- ProForm acquired 70 percent of ClipRite on June 30, 2020, 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 2021 financial statements are as follows: *see image ClipRite sold ProForm inventory costing $72,000 during the last six months of 2020 for $120,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $200,000 during 2021 for $250,000. At year-end, 10 percent is left. Determine the consolidated balances for the following: SalesCost of Goods SoldOperating ExpensesDividend IncomeNet Income Attributable to Noncontrolling InterestInventoryNoncontrolling Interest in Subsidiary, 12/31/21arrow_forwardProForm acquired 70 percent of ClipRite on June 30, 2020, for $770,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $480,000 was recognized and is being amortized at the rate of $12,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $330,000 at the acquisition date. The 2021 financial statements are as follows: ProForm ClipRite Sales $ (820,000 ) $ (640,000 ) Cost of goods sold 545,000 410,000 Operating expenses 120,000 110,000 Dividend income (49,000 ) 0 Net income $ (204,000 ) $ (120,000 ) Retained earnings, 1/1/21 $ (1,100,000 ) $ (870,000 ) Net income (204,000 ) (120,000 ) Dividends declared 120,000 70,000 Retained earnings, 12/31/21 $ (1,184,000 ) $ (920,000 ) Cash and receivables $ 420,000 $ 320,000 Inventory 310,000 720,000 Investment in ClipRite 770,000 0…arrow_forwardProForm acquired 70 percent of ClipRite on June 30, 2023, 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 2024 financial statements are as follows: Items Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/24 Totals Note: Parentheses indicate a credit balance. ProForm $ (800,000) 535,000 100,000 (35,000) $ (200,000) $ (1,300,000) (200,000) 100,000 $ (1,400,000) $ 400,000 290,000 910,000 1,000,000 (300,000) $ 2,300,000 Sales Cost of goods sold Operating expenses Dividend…arrow_forward
- ProForm acquired 70 percent of ClipRite on June 30, 2020, for $770,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $480,000 was recognized and is being amortized at the rate of $12,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $330,000 at the acquisition date. The 2021 financial statements are as follows: ProForm ClipRite Sales $ (820,000 ) $ (640,000 ) Cost of goods sold 545,000 410,000 Operating expenses 120,000 110,000 Dividend income (49,000 ) 0 Net income $ (204,000 ) $ (120,000 ) Retained earnings, 1/1/21 $ (1,100,000 ) $ (870,000 ) Net income (204,000 ) (120,000 ) Dividends declared 120,000 70,000 Retained earnings, 12/31/21 $ (1,184,000 ) $ (920,000 ) Cash and receivables $ 420,000 $ 320,000 Inventory 310,000 720,000 Investment in ClipRite 770,000 0…arrow_forwardProForm acquired 60 percent of ClipRite on June 30, 2023, for $600,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $440,000 was recognized and is being amortized at the rate of $11,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $400,000 at the acquisition date. The 2024 financial statements are as follows: Items Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in clipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/24 Totals Note: Parentheses indicate a credit balance. ProForm $ (810,000) 540,000 110,000 (36,000) $ (196,000) $ (1,000,000) (196,000) 110,000 $ (1,086,000) $ 410,000 300,000 600,000 1,100,000 (500,000) $ 1,910,000 $ (624,000) (200,000) (1,086,000) $ (1,910,000)…arrow_forwardProForm acquired 60 percent of ClipRite on June 30, 2023, for $780,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $560,000 was recognized and is being amortized at the rate of $14,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $520,000 at the acquisition date. The 2024 financial statements are as follows: Items Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 cash and receivables Inventory Investment in ClipRite Fixed assets A32 Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/24 Totals Proform $ (840,000) 555,000 140,000 (54,000) $ (199,000) Sales Cost of goods sold Operating expenses Dividend income Net income attributable to noncontrolling interest Inventory Noncontrolling Interest in subsidiary, 12/31/24 $ (1,300,000) (199,000) 140,000…arrow_forward
- ProForm acquired 60 percent of ClipRite on June 30, 2023, for $600,000 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 $11,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $400,000 at the acquisition date. The 2024 financial statements are as follows: Items Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in clipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/24 Totals ProForm $ (810,000) 540,000 110,000 (36,000) $ (196,000) $ (1,000,000) (196,000) 110,000 $ (1,086,000) $ 410,000 300,000 600,000 1,100,000 (500,000) $ 1,910,000 $ (624,000) (200,000) (1,086,000) $ (1,910,000) ClipRite $ (620,000) 405,000 105,000 $ (110,000) $…arrow_forwardProForm 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 ClipRite $ (900,000) $ (800,000) 450,000 585,000 200,000 (48,000) 150,000 0 $ (163,000) $ (200,000) $ (950,000) (200,000) 80,000 $(1,070,000) $ 400,000 800,000 0 $(2,300,000) (163,000) 200,000 $(2,263,000) $ 500,000 390,000…arrow_forwardProForm 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) $ (163,000) $ $ 500,000 390,000 1,140,000 2,000,000 (700,000) $ 3,330,000 $ (667,000) (400,000) (2,263,000) $ (3,330,000) Sales Cost of goods sold Operating expenses Dividend income Net income…arrow_forward
- Palm Resorts acquired its 70 percent interest in Sun City on January 1, 2017, for $41,750,000. The fair value of the 30 percent noncontrolling interest at the date of acquisition was $14,750,000. Sun City’s date-of-acquisition reported net assets of $5,000,000 were carried at amounts approximating fair value, but it had unrecorded identifiable intangibles, capitalizable per ASC Topic 805, valued at $7,500,000. These intangibles are determined to have limited lives, amortized on a straight-line basis over five years. It is now December 31, 2020, and Sun City reports net income of $10,000,000. Required: Calculate the amount of goodwill originally reported for this acquisition, and its allocation to the controlling and noncontrolling interests. Calculate equity in net income and the noncontrolling interest in net income for 2020, assuming goodwill from this acquisition is impaired by $2,000,000 in 2020.arrow_forwardOn August 1, 2017, Concord Corporation acquired Skysong, Inc. for a cash payment of $2.10 million. At the time of purchase, Skysong's balance sheet showed assets of $4,350,000, liabilities of $2,550,000, and owners' equity of $1,800,000. The fair value of Skysong's identifiable assets is estimated to be $4,326,000. Compute the amount of goodwill acquired by Concord. Value assigned to goodwill $arrow_forwardMoon Company is contemplating the acquisition of Yount, Inc., on January 1, 2015. If Moon acquires Yount, it will pay $730,000 in cash to Yount and acquisition costs of $20,000. The January 1, 2015, balance sheet of Yount, Inc., is anticipated to be as attached:Fair values agree with book values except for the inventory and the depreciable fixed assets, which have fair values of $70,000 and $400,000, respectively. Your projections of the combined operations for 2015 are as follows: Combined sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000 Combined cost of goods sold, including Yount’s beginning inventory, at book value, which will be sold in 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000 Other expenses not including depreciation of Yount assets . . . . . . . . . . . . . . . . . . . . . . . . 25,000Depreciation on Yount fixed assets is…arrow_forward
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