On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $873,000 in cash and stock options. At the acquisition date, NetSpeed had common stock of $880,000 and Retained Earnings of $44,000. The acquisition-date fair value of the 10 percent noncontrolling interest was $97,000. QuickPort attributed the $46,000 excess of NetSpeed's fair value over book value to a database with a five-year remaining life. During the next two years, NetSpeed reported the following: Net Income 2020 $ 61,400 2021 88,200 Dividends Declared $ 6,200 6,200 On July 1, 2020, QuickPort sold communication equipment to NetSpeed for $32,600. The equipment originally cost $37,200 and had accumulated depreciation of $7,000 and an estimated remaining life of three years at the date of the intra-entity transfer. a. Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2021. b. Prepare the worksheet adjustments for the December 31, 2021, consolidation of QuickPort and NetSpeed. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2021. Investment in NetSpeed, Inc., 12/31/21 978,080 × < Required A Required B > Required A Required B wwwwww Prepare the worksheet adjustments for the December 31, 2021, consolidation of QuickPort and NetSpeed. (If no entr required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Transaction 1 2 2 3 3 4 4 Equipment Investment in NetSpeed Accumulated depreciation Accounts Common stock - NetSpeed Retained earnings-NetSpeed Investment in NetSpeed Noncontrolling interest Database Investment in NetSpeed Noncontrolling interest Equity in earnings of NetSpeed Investment in NetSpeed 5 5 Investment in NetSpeed 60 6 7 7 Dividends declared Amortization expense Database Accumulated depreciation Depreciation expense Debit Credit

On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $873,000 in cash and stock options. At the acquisition date, NetSpeed had common stock of $880,000 and Retained Earnings of $44,000. The acquisition-date fair value of the 10 percent noncontrolling interest was $97,000. QuickPort attributed the $46,000 excess of NetSpeed's fair value over book value to a database with a five-year remaining life. During the next two years, NetSpeed reported the following: Net Income 2020 $ 61,400 2021 88,200 Dividends Declared $ 6,200 6,200 On July 1, 2020, QuickPort sold communication equipment to NetSpeed for $32,600. The equipment originally cost $37,200 and had accumulated depreciation of $7,000 and an estimated remaining life of three years at the date of the intra-entity transfer. a. Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2021. b. Prepare the worksheet adjustments for the December 31, 2021, consolidation of QuickPort and NetSpeed. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2021. Investment in NetSpeed, Inc., 12/31/21 978,080 × < Required A Required B > Required A Required B wwwwww Prepare the worksheet adjustments for the December 31, 2021, consolidation of QuickPort and NetSpeed. (If no entr required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Transaction 1 2 2 3 3 4 4 Equipment Investment in NetSpeed Accumulated depreciation Accounts Common stock - NetSpeed Retained earnings-NetSpeed Investment in NetSpeed Noncontrolling interest Database Investment in NetSpeed Noncontrolling interest Equity in earnings of NetSpeed Investment in NetSpeed 5 5 Investment in NetSpeed 60 6 7 7 Dividends declared Amortization expense Database Accumulated depreciation Depreciation expense Debit Credit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 18E

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