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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sagar
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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