Mighty Company purchased a 60 percent interest in Lowly Company on January 1, 2020, for $518,400 in cash. Lowly's book value at that date was reported as $730,000, and the fair value of the noncontrolling interest was assessed at $345,600. Any excess acquisition-date fair value over Lowly's book value is assigned to trademarks to be amortized over 20 years. Subsequently, on January 1, 2021, Lowly acquired a 20 percent interest in Mighty. The price of $322,000 was equivalent to 20 percent of Mighty's book and fair value. Neither company has paid dividends since these acquisitions occurred. On January 1, 2021, Lowly's book value was $985,000, a figure that rises to $1,026,500 (common stock of $300,000 and retained earnings of $726,500) by year-end. Mighty's book value was $1.61 million at the beginning of 2021 and $1.71 million (common stock of $1 million and retained earnings of $710,000) at December 31, 2021. No intra-entity transactions have occurred, and no additional stock has been sold. Each company applies the initial value method in accounting for the individual investments. Prepare worksheet entries which are required to consolidate these two companies for 2021. What is the net income attributable to the noncontrolling interest for this year? 1 2 3 4 5 1 2 3 4 5 Investment in Lowly Retained earnings (Mighty) Common stock (Lowly) Retained earnings (Lowly) Investment in Lowly Noncontrolling interest in Lowly Treasury stock Trademarks Investment in Lowly Investment in Mighty Amortization expense Trademarks Show Transcribed Text Show Transcribed Text 3 C ✓ ♥ $ 157,500 X ✓ ✓ ✓ ✓ ✓ ✓ ›› ✓ ✓ 103,200 300,000 322,000 103,200 518,400 x What is the net income attributable to the noncontrolling interest for this year? (Enter your answers in dollars, not in millions.) Net income attributable to the noncontrolling interest 322,000
Mighty Company purchased a 60 percent interest in Lowly Company on January 1, 2020, for $518,400 in cash. Lowly's book value at that date was reported as $730,000, and the fair value of the noncontrolling interest was assessed at $345,600. Any excess acquisition-date fair value over Lowly's book value is assigned to trademarks to be amortized over 20 years. Subsequently, on January 1, 2021, Lowly acquired a 20 percent interest in Mighty. The price of $322,000 was equivalent to 20 percent of Mighty's book and fair value. Neither company has paid dividends since these acquisitions occurred. On January 1, 2021, Lowly's book value was $985,000, a figure that rises to $1,026,500 (common stock of $300,000 and retained earnings of $726,500) by year-end. Mighty's book value was $1.61 million at the beginning of 2021 and $1.71 million (common stock of $1 million and retained earnings of $710,000) at December 31, 2021. No intra-entity transactions have occurred, and no additional stock has been sold. Each company applies the initial value method in accounting for the individual investments. Prepare worksheet entries which are required to consolidate these two companies for 2021. What is the net income attributable to the noncontrolling interest for this year? 1 2 3 4 5 1 2 3 4 5 Investment in Lowly Retained earnings (Mighty) Common stock (Lowly) Retained earnings (Lowly) Investment in Lowly Noncontrolling interest in Lowly Treasury stock Trademarks Investment in Lowly Investment in Mighty Amortization expense Trademarks Show Transcribed Text Show Transcribed Text 3 C ✓ ♥ $ 157,500 X ✓ ✓ ✓ ✓ ✓ ✓ ›› ✓ ✓ 103,200 300,000 322,000 103,200 518,400 x What is the net income attributable to the noncontrolling interest for this year? (Enter your answers in dollars, not in millions.) Net income attributable to the noncontrolling interest 322,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
D1.
Transcribed Image Text:Mighty Company purchased a 60 percent interest in Lowly Company on January 1, 2020, for $518,400 in cash. Lowly's
book value at that date was reported as $730,000, and the fair value of the noncontrolling interest was assessed at
$345,600. Any excess acquisition-date fair value over Lowly's book value is assigned to trademarks to be amortized over
20 years. Subsequently, on January 1, 2021, Lowly acquired a 20 percent interest in Mighty. The price of $322,000 was
equivalent to 20 percent of Mighty's book and fair value.
Neither company has paid dividends since these acquisitions occurred. On January 1, 2021, Lowly's book value was
$985,000, a figure that rises to $1,026,500 (common stock of $300,000 and retained earnings of $726,500) by year-end.
Mighty's book value was $1.61 million at the beginning of 2021 and $1.71 million (common stock of $1 million and retained
earnings of $710,000) at December 31, 2021. No intra-entity transactions have occurred, and no additional stock has been
sold. Each company applies the initial value method in accounting for the individual investments.
Prepare worksheet entries which are required to consolidate these two companies for 2021.
What is the net income attributable to the noncontrolling interest for this year?
1
2
3
4
5
1
2
3
4
5
Investment in Lowly
Retained earnings (Mighty)
Common stock (Lowly)
Retained earnings (Lowly)
Investment in Lowly
Noncontrolling interest in Lowly
Treasury stock
Trademarks
Investment in Lowly
Investment in Mighty
Amortization expense
Trademarks
Show Transcribed Text
Show Transcribed Text
Ü
please I need help for this question
Ĵ
c
✓
$ 157,500
✓
✓
✓
✓
✓
✓
✓
103,200 x
300,000✔
322,000✔
103,200 X
What is the net income attributable to the noncontrolling interest for this year? (Enter your answers in dollars, not in
millions.)
Net income attributable to the noncontrolling interest
518,400 X
322,000✔
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