On January 1, 2019, Telconnect acquires 70 percent of Bandmor for $490,000 cash. The remaining 30 percent of Bandmor’s shares continued to trade at a total value of $210,000. The new subsidiary reported common stock of $300,000 on that date, with retained earnings of $180,000. A patent was undervalued in the company’s financial records by $30,000. This patent had a five-year remaining life. Goodwill of $190,000 was recognized and allocated proportionately to the controlling and noncontrolling interests. Bandmor earns net income and declares cash dividends as follows: Year Net Income Dividends 2019 $ 75,000 $ 39,000 2020 96,000 44,000 2021 110,000 60,000 On December 31, 2021, Telconnect owes $22,000 to Bandmor. If Telconnect has applied the equity method, what consolidation entries are needed as of December 31, 2021? If Telconnect has applied the initial value method, what Entry *C is needed for a 2021 consolidation? If Telconnect has applied the partial equity method, what Entry *C is needed for a 2021 consolidation?
On January 1, 2019, Telconnect acquires 70 percent of Bandmor for $490,000 cash. The remaining 30 percent of Bandmor’s shares continued to trade at a total value of $210,000. The new subsidiary reported common stock of $300,000 on that date, with
| Year | Net Income | Dividends | ||
| 2019 | $ | 75,000 | $ | 39,000 |
| 2020 | 96,000 | 44,000 | ||
| 2021 | 110,000 | 60,000 | ||
On December 31, 2021, Telconnect owes $22,000 to Bandmor.
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If Telconnect has applied the equity method, what consolidation entries are needed as of December 31, 2021?
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If Telconnect has applied the initial value method, what Entry *C is needed for a 2021 consolidation?
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If Telconnect has applied the partial equity method, what Entry *C is needed for a 2021 consolidation?
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What noncontrolling interest balances will appear in consolidated financial statements for 2021?
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