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. At yearend, 1 percent is left. What are the consolidated balances? Proform acquired 70 percent of ClipRite on June 30, 2020, for $910,00 in cash. Based on ClipRites acquistion-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 acuisition. 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 Costs of goods sold 535,000 400,000 Operating expenses 100,000 100,000 Dividend Income -35,000 Net Income -200,000 -100,000 Retained earning, 1/1/21 -1,300,000 -850,000 Net Income -200,000 -100,000 Dividend declared 100,000 50,000 Retained earings, 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 Fixed Assets 1,000,000 600,000 Accumulated depreciation -300,000 -200,000 Totals 2,300,000 1,400,000 Liablities -600,000 -400,000 commn Stock -300,000 -100,000 Retaied earinings, 12/31/21 -1,400,000 -900,000 -2,300,000 -1,400,000

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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Question:

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. At yearend, 1 percent is left.

What are the consolidated balances?

Proform acquired 70 percent of ClipRite on June 30, 2020, for $910,00 in cash. Based on ClipRites acquistion-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 acuisition. 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
Costs of goods sold		535,000	400,000
Operating expenses		100,000	100,000
Dividend Income		-35,000
	Net Income	-200,000	-100,000
Retained earning, 1/1/21	-1,300,000	-850,000
Net Income		-200,000	-100,000
Dividend declared		100,000	50,000
	Retained earings, 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
Fixed Assets		1,000,000	600,000
Accumulated depreciation	-300,000	-200,000
	Totals	2,300,000	1,400,000
Liablities		-600,000	-400,000
commn Stock		-300,000	-100,000
Retaied earinings, 12/31/21	-1,400,000	-900,000
		-2,300,000	-1,400,000