Manji On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $36,000. Calvin Co. has one recorded asset, aspecialized production machine with a book value of $10,000 and no liabilities. The fair value of the machine is $50,000, and theremaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secretwith an estimated future life of 4 years. Calvin's total acquisition date fair value is $60,000.At the end of the year, Calvin reports the following in its financial statements:RevenuesExpensesNet incomeDividends paid$ 50,00020,000$ 30,000MachineOther assetsTotal assets$ 9,00026,000$35,000Common stockRetained earnings$ 10,000Total equity25,000$35,000$ 5,000Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest insubsidiary income, noncontrolling interest, Calvin's machine (net of accumulated depreciation), and the process trade secret.Noncontrolling interest in subsidiary incomeTotal noncontrolling interestCalvin's machine (net accumulated depreciation)Process trade secretAmount

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Answered: On January 1, Beckman, Inc., acquires…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 62P

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On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $47,052. Calvin Co. has one recorded asset, a specialized production machine with a book value of $10,000 and no liabilities. The fair value of the machine is $66,500, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin’s total acquisition date fair value is $78,420. At the end of the year, Calvin reports the following in its financial statements: Revenues $ 54,750 Machine $ 9,000 Common stock $ 10,000 Expenses 22,200 Other assets 28,550 Retained earnings 27,550 Net income $ 32,550 Total assets $ 37,550 Total equity $ 37,550 Dividends paid $ 5,000 Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest…
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On June 28, Holly Co. acquired 100% of the common stock of Michael Co. The purchase price allocation included the following items: $5.1 million for a patent; $4.1 million for a trademark; $3.1 million for in-process research and development; $6.1 million for goodwill. Flax's policy is to amortize intangible assets using the straight- line method, no residual value, using a five-year useful life. REQUIRED: What is the total amount of expenses (ignoring taxes) that would appear on Flax's income statement for the year ended December 31 related to these items.

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