a. Compute the 2024 consolidated net income before allocation to the controlling and noncontrolling interests. b. In 2024, assuming K-Tech has declared no dividends, compute the noncontrolling interest's share of the subsidiary's income and the ending balance of the noncontrolling interest in the subsidiary. c. Compute the amount reported for trademarks in the 2024 consolidated balance sheet.
a. Compute the 2024 consolidated net income before allocation to the controlling and noncontrolling interests. b. In 2024, assuming K-Tech has declared no dividends, compute the noncontrolling interest's share of the subsidiary's income and the ending balance of the noncontrolling interest in the subsidiary. c. Compute the amount reported for trademarks in the 2024 consolidated balance sheet.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2023, French Company acquired 60 percent of K-Tech Company for $333,000 when K-Tech's book value was $433,000.
The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $222,000. At the acquisition date, K-Tech's
trademark (20-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (10-year remaining
life) was undervalued by $42,000.
In 2023, K-Tech reports $11,000 net income and declares no dividends. At the end of 2024, the two companies report the following
figures (stockholders' equity accounts have been omitted):
Items
Current assets
Trademarks
Patented technology
Liabilities
Revenues
Expenses
Investment income
K-Tech Company
French Company
Carrying Amounts
Amounts
$ 638,000
$ 318,000
278,000
TH
218,000
428,000
168,000
(408,000)
(138,000)
(918,000)
(418,000)
318,000
482,000
Not given
Note: Parentheses indicate a credit balance.
Carrying K-Tech Company
Fair Values
a. Consolidated net income
b(1). Noncontrolling interest's share of the subsidiary's income
b(2). Noncontrolling interest at end of 2024
c. Consolidated trademarks
$ 338,000
298,000
210,000
(138,000)
0
0
0
Required:
a. Compute the 2024 consolidated net income before allocation to the controlling and noncontrolling interests.
b. In 2024, assuming K-Tech has declared no dividends, compute the noncontrolling interest's share of the subsidiary's income and
the ending balance of the noncontrolling interest in the subsidiary.
c. Compute the amount reported for trademarks in the 2024 consolidated balance sheet.
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