ecorded asset, a specialized production machine with a book value of $15,100 and no 88,100, and the remaining useful life is estimated to be 10 years. Any remaining exces rocess trade secret with an estimated future life of 4 years. Calvin's total acquisition di it the end of the year, Calvin reports the following in its financial statements: Revenues Expenses $ 65,550 29,250 Net income $ 36,300 Machine Other assets Total assets $ 13,590 32,810 Common stock Retained earnings $ 46,400 Total equity Dividends paid $ 5,000 equired:
ecorded asset, a specialized production machine with a book value of $15,100 and no 88,100, and the remaining useful life is estimated to be 10 years. Any remaining exces rocess trade secret with an estimated future life of 4 years. Calvin's total acquisition di it the end of the year, Calvin reports the following in its financial statements: Revenues Expenses $ 65,550 29,250 Net income $ 36,300 Machine Other assets Total assets $ 13,590 32,810 Common stock Retained earnings $ 46,400 Total equity Dividends paid $ 5,000 equired:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:On January 1, Beckman, Incorporated, acquires 60 percent of the outstanding stock of Calvin for $58,884. Calvin Company has one
recorded asset, a specialized production machine with a book value of $15,100 and no liabilities. The fair value of the machine is
$88,100, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded
process trade secret with an estimated future life of 4 years. Calvin's total acquisition date fair value is $98,140.
At the end of the year, Calvin reports the following in its financial statements:
Revenues
Expenses
Net income
Dividends paid
Required:
31,300
$ 65,550
29,250
Machine
Other assets
Total assets
$ 13,590
32,810
$ 46,400
Common stock
Retained earnings
Total equity
$ 15,100
$ 46,400
$ 5,000
$ 36,300
Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in
subsidiary income, noncontrolling interest, Calvin's machine (net of accumulated depreciation), and the process trade secret.
Noncontrolling interest in subsidiary income
Total noncontrolling interest
Calvin's machine (net accumulated depreciation)
Process trade secret
Amount
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