On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $41,568. Calvin Co. has one recorded asset, a specialized production machine with a book value of $14,200 and no liabilities. The fair value of the machine is $59,200, 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 $69,280. At the end of the year, Calvin reports the following in its financial statements: Revenues Expenses Net income Dividends paid $ 68,250 26,400 $ 41,850 $5,000 Machine Other assets Total assets Noncontrolling interest in subsidiary income Total noncontrolling interest Calvin's machine (net accumulated depreciation) Process trade secret $ $ $ $ $ 12,780 38,270 $ 51,050 Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin's machine (net of accumulated depreciation), and the process trade secret. Amount Common stock Retained earnings Total equity 13,932✔ 39,644✔ 54,700 X 7,560 $ 14,200 36,850 $ 51,050

On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $41,568. Calvin Co. has one recorded asset, a specialized production machine with a book value of $14,200 and no liabilities. The fair value of the machine is $59,200, 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 $69,280. At the end of the year, Calvin reports the following in its financial statements: Revenues Expenses Net income Dividends paid $ 68,250 26,400 $ 41,850 $5,000 Machine Other assets Total assets Noncontrolling interest in subsidiary income Total noncontrolling interest Calvin's machine (net accumulated depreciation) Process trade secret $ $ $ $ $ 12,780 38,270 $ 51,050 Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin's machine (net of accumulated depreciation), and the process trade secret. Amount Common stock Retained earnings Total equity 13,932✔ 39,644✔ 54,700 X 7,560 $ 14,200 36,850 $ 51,050

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $41,568. Calvin Co. has one recorded asset, a
specialized production machine with a book value of $14,200 and no liabilities. The fair value of the machine is $59,200, 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 $69,280.
At the end of the year, Calvin reports the following in its financial statements:
Revenues
Expenses
Net income
Dividends paid
$ 68,250
26,400
$ 41,850
$ 5,000
Machine
Other assets
Total assets
Noncontrolling interest in subsidiary income
Total noncontrolling interest
Calvin's machine (net accumulated depreciation)
Process trade secret
$
$
Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in
subsidiary income, noncontrolling interest, Calvin's machine (net of accumulated depreciation), and the process trade secret.
EA EA
$
$
$ 12,780
38, 270
$ 51,050
Amount
Common stock
Retained earnings
Total equity
13,932
39,644
54,700 X
7,560
$ 14,200
36,850
$ 51,050

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