On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $47,220. Calvin Co. has one recorded asset, a specialized production machine with a book value of $16,000 and no liabilities. The fair value of the machine is $68,500, 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 $78,700. At the end of the year, Calvin reports the following in its financial statements: Revenues Expenses Net income Dividends paid $ 65,250 30,150 $ 35,100 $ 5,000 Machine Other assets Total assets Noncontrolling interest in subsidiary income Total noncontrolling interest Calvin's machine (net accumulated depreciation) Process trade secret $ 14,400 31,700 $ 46,100 Amount Common stock Retained earnings Total equity 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. $ 16,000 30,100 $ 46,100

On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $47,220. Calvin Co. has one recorded asset, a specialized production machine with a book value of $16,000 and no liabilities. The fair value of the machine is $68,500, 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 $78,700. At the end of the year, Calvin reports the following in its financial statements: Revenues Expenses Net income Dividends paid $ 65,250 30,150 $ 35,100 $ 5,000 Machine Other assets Total assets Noncontrolling interest in subsidiary income Total noncontrolling interest Calvin's machine (net accumulated depreciation) Process trade secret $ 14,400 31,700 $ 46,100 Amount Common stock Retained earnings Total equity 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. $ 16,000 30,100 $ 46,100

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Case E Sanders Company purchased the following on January 1, 2019: Office equipment at a cost of $60,000 with an estimated useful life to the company of three years and a residual value of $15,000. The company uses the double-declining-balance method of depreciation for the equipment. Factory equipment at an invoice price of $880,000 plus shipping costs of $20,000. The equipment has an estimated useful life of 100,000 hours and no residual value. The company uses the units-of-production method of depreciation for the equipment. A patent at a cost of $330,000 with an estimated useful life of 15 years. The company uses the straight-line method of amortization for intangible assets with no residual value. The company's year ends on December 31. Required: 1-a. Prepare a partial depreciation schedule of office equipment for 2019, 2020, and 2021. 1-b. Prepare a partial depreciation schedule of factory equipment. The company used the equipment for 8,000 hours in 2019, 9,200 hours in 2020, and…
4
vvv Limited purchased a machine for $300,000 cash on 1 July 2005. The useful life of the machine is 10 years, no residual value and straight line method for depreciation. The company uses the revaluation model. On 31 December 2005, the fair value was $332,500 for the machine. On 31 December 2006, the fair value was $280,500 for the machine. The machine has a fair value of $302,250 on 31 December 2007 and $250,950 on 31 December 2008. Required: Provide the journal entries related to machine.
Corning Industries owns a patent for which it paid $77,000. At the end of the current year, accumulated amortization on the patent totaled $14,000. Due to adverse economic conditions, Corning’s management determined that it should assess whether an impairment loss should be recognized for the patent. The estimated undiscounted future cash flows to be provided by the patent total $45,000, and the patent's fair value is $30,000. (a) What is the amount of the impairment loss, if any, on the patent at the end of the current year? (b) What is the book value of the patent after any impairment loss is recorded?
Bluestone Company had three intangible assets at the end of the current year: a. A patent purchased this year from Miller Company on January 1 for a cash cost of $4,000. When purchased, the patent had an estimated life of 10 years. b. A trademark was registered with the federal government for $11,000. Management estimated that the trademark could be worth as much as $260,000 because it has an indefinite life. c. Computer licensing rights were purchased this year on January 1 for $36,000. The rights are expected to have a four-year useful life to the company. Required: 1. Compute the acquisition cost of each intangible asset. 2. Compute the amortization of each intangible for the current year ended December 31. 3. Show how these assets and any related expenses should be reported on the balance sheet and income statement for the current year.
During its inception, Devon Company purchased land for $250,000 and a building for $200,000. After exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary, Regan Company, in exchange for 20,000 shares of Regan's $10 par value stock. Devon uses straight-line depreciation. Useful life for the building is 20 years, with zero residual value. An appraisal revealed that the building has a fair value of $250,000. What will Devon record as Additional Paid in Capital as a result of this transaction? Group of answer choices additional paid-in capital of $0. additional paid-in capital of $270,000. additional paid-in capital of $350,000. additional paid-in capital of $300,000.
As of January 1, Year One, Company Z has no liabilities and only two assets: a donut maker with a net book value of $300,000 (and a fair value of $360,000) and a cookie machine with a net book value of $400,000 (and a fair value of $440,000). Each of these assets has a remaining useful life of ten years and no expected residual value. Company A offers $1 million to acquire all of the ownership of Company Z. The owners of Company Z hold out and manage to get $1.2 million in cash. What depreciation/amortization expense will Company A recognize in connection with these acquired assets at the end of Year One? Put responses in the correct input to answer the question. Select a response, navigate to the desired input and insert the response. Responses can be selected and inserted using the space bar, enter key, left mouse button or touchpad. Responses can also be moved by dragging with a mouse. The journal entry to be recorded by Company A for this acquisition is: Debit Response area…
Sheridan Corp is a publicly traded company that has just purchased a new piece of equipment for its production process. The equipment costs $54000 with a $8800 residual value, an estimated useful life of 8 years and an expected life of 10 years with a $4000 salvage value. Assuming that Sheridan has a December 31 year end and the equipment was purchased on January 1, how much depreciation expense should the company record at the end of year one? The company uses the straight-line method.Questi Multiple CQuestioMultiple Ch $4520 $5085 $5 650 $5400
Yokoyama Company owns a machine with a cost of $92,000 and accumulated depreciation of $18,500 that can be sold for $66,000 less a 5% sales commission. Alternatively, Yokoyama Company can lease the machine to another company for 3 years for a total of $74,000, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Yokoyama Company on the machine would total $10,500 over the 3 years. Prepare a differential analysis on February 21 as to whether Yokoyama Company should lease (Alternative 1) or sell (Alternative 2) the machine. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lease Machine (Alt. 1) or Sell Machine (Alt. 2) February 21 Differential Effect Lease Sell Machine Machine (Alternative 2) (Alternative 1) (Alternative 2) Revenues Costs Profit (loss) Should Yokoyama Company lease (Alternative 1) or sell (Alternative 2) the machine?
Dontelli Enterprises began operations on July 1, 2012, as a manufacturer of heat sensitive valves used in the plumbing industry. Effective at the beginning of 2014, Platco, an American company, acquired an 80% interest in Dontelli paying 400,000 FC. Of the purchase price in excess of book value, 42,000 FC was allocated to patents having a remaining useful life of 10 years and the balance was allocated to goodwill. It has been determined that the functional currency is the FC.Dontelli’s condensed trial balances, expressed in FC, at selected rates are as follows:(attached)Additional equipment was purchased on April 1, 2015. Dividends were paid on June 30 of 2014 and 2015. At the end of 2015, goodwill traceable to the acquisition of Dontelli was tested for impairment, and accordingly, the goodwill was written down by 20%. Calculate the balance of the cumulative translation adjustment as of year-end 2014 and 2015. Given the consolidated income statement for years 2014 and 2015, determine…