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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

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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2023, French Company acquired 60 percent of K-Tech Company for $319,500 when K-Tech's book value was $419,500. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $213,000. At the acquisition date, K-Tech's trademark (10-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (5-year remaining life) was undervalued by $33,000. In 2023, K-Tech reports $19,500 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 French Company Carrying Amounts $ 631,000 271,000 421,000 (401,000) K-Tech Company Carrying Amounts $ 311,000 211,000 161,000 (131,000) K-Tech Company Fair Values $ 331,000 291,000 194,000 (131,000) 0 Expenses Investment income (911,000) (411,000) 489,000 Not given 311,000 0 Note: Parentheses indicate a credit balance. Required: 0 0 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. 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
Transcribed Image Text:On January 1, 2023, French Company acquired 60 percent of K-Tech Company for $319,500 when K-Tech's book value was $419,500. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $213,000. At the acquisition date, K-Tech's trademark (10-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (5-year remaining life) was undervalued by $33,000. In 2023, K-Tech reports $19,500 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 French Company Carrying Amounts $ 631,000 271,000 421,000 (401,000) K-Tech Company Carrying Amounts $ 311,000 211,000 161,000 (131,000) K-Tech Company Fair Values $ 331,000 291,000 194,000 (131,000) 0 Expenses Investment income (911,000) (411,000) 489,000 Not given 311,000 0 Note: Parentheses indicate a credit balance. Required: 0 0 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. 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
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