On January 1, Beckman, Incorporated, acquires 60 percent of the outstanding stock of Calvin for $59,232. Calvin Company has onerecorded asset, a specialized production machine with a book value of $19,500 and no liabilities. The fair value of the machine is$87,000, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecordedprocess trade secret with an estimated future life of 4 years. Calvin's total acquisition date fair value is $98,720.At the end of the year, Calvin reports the following in its financial statements:RevenuesExpenses$ 65,55026,100Net incomeDividends paid$ 39,450MachineOther assetsTotal assets$ 17,55036,400$ 53,950Common stockRetained earningsTotal equity$ 19,50034,450$ 53,950$ 5,000Required:Determine 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

Step 1: Net Income multiplied by (1-0.60) Step 2: Total Equity multiplied by (1-0.60) Step 3: Fair…

Answered: On January 1, Beckman, Incorporated,…

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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