On January 1, 2021, Johnsonville Enterprises, Inc., acquired 80 percent of Stayer Company's outstanding common shares in exchange for $3,000,000 cash. The price paid for the 80 percent ownership interest was proportionately representative of the fair value of all of Stayer's shares. At acquisition date, Stayer's books showed assets of $4,200,000 and liabilities of $1,600,000. The recorded assets and liabilities had fair values equal to their individual book values except that a building (10-year remaining life) with book value of $195,000 had an appraised fair value of $345,000. Stayer's books showed a $175,500 carrying amount for this building at the end of 2021. Also, at acquisition date Stayer possessed unrecorded technology processes (zero book value) with an estimated fair value of $1,000,000 and a 20-year remaining life. For 2021, Johnsonville reported net income of $650,000 (before recognition of Stayer's income), and Stayer separately reported earnings of $350,000. During 2021, Johnsonville declared dividends of $85,000 and Stayer declared $50,000 in dividends. Compute the amounts that Johnsonville Enterprises should report in its December 31, 2021, consolidated financial statements for the following items: a. b. C. d. e. Answer is complete but not entirely correct. Stayer's building (net of accumulated depreciation). Stayer's technology processes (net of accumulated amortization). Net income attributable to the noncontrolling interest. Net income attributable to controlling interest. Noncontrolling interest in Stayer. $ 180,000 X S 1,000,000 $ 40,000 x $ 960,000 X $750,000 X
On January 1, 2021, Johnsonville Enterprises, Inc., acquired 80 percent of Stayer Company's outstanding common shares in exchange for $3,000,000 cash. The price paid for the 80 percent ownership interest was proportionately representative of the fair value of all of Stayer's shares. At acquisition date, Stayer's books showed assets of $4,200,000 and liabilities of $1,600,000. The recorded assets and liabilities had fair values equal to their individual book values except that a building (10-year remaining life) with book value of $195,000 had an appraised fair value of $345,000. Stayer's books showed a $175,500 carrying amount for this building at the end of 2021. Also, at acquisition date Stayer possessed unrecorded technology processes (zero book value) with an estimated fair value of $1,000,000 and a 20-year remaining life. For 2021, Johnsonville reported net income of $650,000 (before recognition of Stayer's income), and Stayer separately reported earnings of $350,000. During 2021, Johnsonville declared dividends of $85,000 and Stayer declared $50,000 in dividends. Compute the amounts that Johnsonville Enterprises should report in its December 31, 2021, consolidated financial statements for the following items: a. b. C. d. e. Answer is complete but not entirely correct. Stayer's building (net of accumulated depreciation). Stayer's technology processes (net of accumulated amortization). Net income attributable to the noncontrolling interest. Net income attributable to controlling interest. Noncontrolling interest in Stayer. $ 180,000 X S 1,000,000 $ 40,000 x $ 960,000 X $750,000 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give solution in image format thanku
Transcribed Image Text:On January 1, 2021, Johnsonville Enterprises, Inc., acquired 80 percent of Stayer Company's outstanding common shares in exchange
for $3,000,000 cash. The price paid for the 80 percent ownership interest was proportionately representative of the fair value of all of
Stayer's shares.
At acquisition date, Stayer's books showed assets of $4,200,000 and liabilities of $1,600,000. The recorded assets and liabilities had
fair values equal to their individual book values except that a building (10-year remaining life) with book value of $195,000 had an
appraised fair value of $345,000. Stayer's books showed a $175,500 carrying amount for this building at the end of 2021.
Also, at acquisition date Stayer possessed unrecorded technology processes (zero book value) with an estimated fair value of
$1,000,000 and a 20-year remaining life. For 2021, Johnsonville reported net income of $650,000 (before recognition of Stayer's
income), and Stayer separately reported earnings of $350,000. During 2021, Johnsonville declared dividends of $85,000 and Stayer
declared $50,000 in dividends.
Compute the amounts that Johnsonville Enterprises should report in its December 31, 2021, consolidated financial statements for the
following items:
a.
b.
C.
d.
e.
> Answer is complete but not entirely correct.
Stayer's building (net of accumulated depreciation).
Stayer's technology processes (net of accumulated amortization).
Net income attributable to the noncontrolling interest.
Net income attributable to controlling interest.
Noncontrolling interest in Stayer.
$ 180,000 X
$
1,000,000
$40,000
$960,000 X
$750,000 X
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 7 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education