Excess identifiable to net assets Nick NV acquired a 90 percent interest in Kim NV on January 1, 2014, by paying $9.000,000 cash. At the time, Kim NV's net assets were $9,000.000. It was also learned that some of Kim NV's net assets book values were different from their fair values. Inventory was overvalued by $100,000, and building with remaining useful life of 6 years was undervalued by $600,000. Separate finančiN statements of Nick NV and Kim NV at December 31, 2014, are as follows (in thousands): Nick NV Kim NV Combined Income and Retained Earnings Statements for the Year Ended December 31 $ 9,800 450 $ 4.700 Sales Income from Kim NV Cost of sales Depreciation expenses Other expenses Net income (6,100) (1,000) (150) 3,000 (3,000) (500) (700) 500 Add: Beginning retained January 1 Deduct: Dividends Retained earnings December 31 11,200 (600) $13.600 4,000 (100) S 4400

Excess identifiable to net assets Nick NV acquired a 90 percent interest in Kim NV on January 1, 2014, by paying $9.000,000 cash. At the time, Kim NV's net assets were $9,000.000. It was also learned that some of Kim NV's net assets book values were different from their fair values. Inventory was overvalued by $100,000, and building with remaining useful life of 6 years was undervalued by $600,000. Separate finančiN statements of Nick NV and Kim NV at December 31, 2014, are as follows (in thousands): Nick NV Kim NV Combined Income and Retained Earnings Statements for the Year Ended December 31 $ 9,800 450 $ 4.700 Sales Income from Kim NV Cost of sales Depreciation expenses Other expenses Net income (6,100) (1,000) (150) 3,000 (3,000) (500) (700) 500 Add: Beginning retained January 1 Deduct: Dividends Retained earnings December 31 11,200 (600) $13.600 4,000 (100) S 4400

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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

Excess identifiable to net assets
Nick NV acquired a 90 percent interest in Kim NV on January 1, 2014, by paying $9.000,000 cash. At
the time, Kim NV's net assets were $9,000.000. It was also learned that some of Kim NV's net assets
book values were different from their fair values. Inventory was overvalued by $100,000, and building
with remaining useful life of 6 years was undervalued by $600,000. Separate finančiN statements of Nick
NV and Kim NV at December 31, 2014, are as follows (in thousands):
Nick NV
Kim NV
Combined Income and Retained Earnings
Statements for the Year Ended December 31
$ 9,800
450
$ 4.700
Sales
Income from Kim NV
Cost of sales
Depreciation expenses
Other expenses
Net income
(6,100)
(1,000)
(150)
3,000
(3,000)
(500)
(700)
500
Add: Beginning retained January 1
Deduct: Dividends
Retained earnings December 31
11,200
(600)
$13.600
4,000
(100)
S 4400

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