plzz answer all parts thnku Paramount Corporation acquired its 75 percent investment in Sun Corporation in January 2015, for $2,910,000, and accounts for its investment internally using the complete equity method. At theacquisition date, total book value of Sun was $1,500,000, including $800,000 of retained earnings, and the estimated fair value of the 25 percent noncontrolling interest was 5790,000. The fair valuesof Sun's assets and liabilities were equal to their carrying values, except for the following itemsFair value less Book valueAccounts receivableS(100,000IventoryEquipment (10 years, straght-line)Patents (5 years, straigh. ine)Deferred tax liabiities (created as a result of the nontaxable acquisnion125,000(400.00)200.00075.000The receivables were collected and the inventory sold during the first three years following the acquisition, Deferred tax lablities of $60.000 were reversed during 2015-2020. An impairment testmade at the end of 2020 indicates a remaining value of $2.000,000 for the goodwill recognized as a result of the acquisition. Sun's shareholders equity is $2.500,000, including $1.800.000 of retainedearnings, at the end of 2020.For all answers below Enter answers using all zeros, do not abbreviate to thousands or millions.Required(a) Calculate the amount of goodwil initially recognized as a result of the acquisition, and its alliocation to the controling and noncontrolling interestsAllocation of goodwillGoodwillParamount's share of goodwiNoncontrolting ierests share of goodwi(b) Calculate the balance in the investment account, carried on Paramount's books, and the value of the noncontrolling interest, reported in the equity section of the consolidated balance sheet, as ofthe end of 2020Balances as of 2020 yearendinvestment in SunNoncontrolling interestain SunSic) Assume eliminating entry (C to reverse Paramount's equity method entries for 2021, has been made. Prepare 2021 eiminating entries ( and R to adjust Sun's assets to the correct values as ofthe beginning of 2021, eliminate the remainder of the investment, and recognize the bepnning-of-2021 value of the noncontrollig interestConsolidation journalCredit

Acquisitions accounting is a set of formal guidelines describing how asset , liabilities, non…

cquisition date, total book value of Sun was $1,500,000, including $800,000 of retained earnings, and the estimated fair value of the 25 percent noncontrolling interest was $790,000. M Sun's assets and liabilities were equal to their carrying values, except for the following items: Fair value less Book value Accounts recelvable K100.000 125,000) Iventory Equipment (10 years, straght ine) Patents (5 years, strag ine) Defered tax liabilites toreated as a resut of the nontable acquison (400.000 200.000 000 The receivables were collected and the inventory sold during the first three years following the acquisition. Deferred tax lablities of s40.000 were reversed during 2015-2020. An impair made at the end of 2020 indicates a remaining value of $2.000,000 for the goodwill recognized as a result of the acquisition. Surs shareholders equity is $2.500,000, including $1.800.00 earnings, at the end of 2020. Eor all answers below Enter answers using all zeres, de not abbreviate to thousands or millions. Required (a) Calculate the amount of goodwil initially recognized as a result of the acquisition and its allocation to the controling and noncontrolling interests Allecation of geodwill Goodwill Paramounts share of goodwi Noncontroting teress share of goodwil (b) Calculate the balance in the investment account, carried on Paramounts books, and the value of the noncontrolling interest, reported in the equity section of the consolidated balance the end of 2020. Balances a f 200 yearend Investment in Sun Noncontrollingg interest in Suns i) Assume eliminating entry (C to reverse Paramountr's equity method entries for 2021, has been made. Prepare 2021 eimnating entries ( and R to adjust Sun's assets to the corect the brenning of 2021, eliminate the remainder of the investment, and recognize the begnning of 2021 value of the noncontrollng interest

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q