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Parker, Inc., acquires 70 percent of Sawyer Company for $420,000 The remaining 30 percent of Sawyer's outstanding shares continue to trade at a collective value of $174,000. On the acquisition date, Sawyer has the following accounts Current assets Land Buildings Liabilities Revenues Expenses Book Value $ 210,000 170,000 300,000 (280,000) The buildings have a 10-year remaining life. In addition, Sawyer holds a patent worth $140,000 that has a five-year remaining life but is not recorded on its financial records. At the end of the year, the two companies report the following balances Parker (900,000) $ (600,000) 600,000 400,000 Combined revenues Combined expenses Consolidated net income Fair Value $ 210,000 180,000 330,000 (280,000) a. Assume that the acquisition took place on January 1. What figures would appear in a consolidated income statement for this year? b. Assume that the acquisition took place on April 1 Sawyer's revenues and expenses occurred uniformly throughout the year What amounts would appear in a consolidated income statement for this year? Net income attributable to noncontrolling interest Net income atsnbutable to Parker. Inc a. January 1 b. April 1

Parker, Inc., acquires 70 percent of Sawyer Company for $420,000 The remaining 30 percent of Sawyer's outstanding shares continue to trade at a collective value of $174,000. On the acquisition date, Sawyer has the following accounts Current assets Land Buildings Liabilities Revenues Expenses Book Value $ 210,000 170,000 300,000 (280,000) The buildings have a 10-year remaining life. In addition, Sawyer holds a patent worth $140,000 that has a five-year remaining life but is not recorded on its financial records. At the end of the year, the two companies report the following balances Parker (900,000) $ (600,000) 600,000 400,000 Combined revenues Combined expenses Consolidated net income Fair Value $ 210,000 180,000 330,000 (280,000) a. Assume that the acquisition took place on January 1. What figures would appear in a consolidated income statement for this year? b. Assume that the acquisition took place on April 1 Sawyer's revenues and expenses occurred uniformly throughout the year What amounts would appear in a consolidated income statement for this year? Net income attributable to noncontrolling interest Net income atsnbutable to Parker. Inc a. January 1 b. April 1

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Parker, Inc., acquires 70 percent of Sawyer Company for $420,000 The remaining 30 percent of Sawyer's outstanding shares continue to trade at a collective value of $174,000. On the acquisition date. Sawyer has the following accounts: Current assets Land Buildings Liabilities Revenues Expenses Book Value $ 210,000 170,000 300,000 (280,000) The buildings have a 10-year remaining life. In addition, Sawyer holds a patent worth $140,000 that has a five-year remaining life but is not recorded on its financial records. At the end of the year, the two companies report the following balances Parker Sawyer $ (900,000) $ (600,000) 600,000 400,000 Combined revenues Combined expenses Consolidated net income Fair Value $ 210,000 180,000 330,000 (280,000) e. Assume that the acquisition took place on January 1. What figures would appear in a consolidated income statement for this year? b. Assume that the acquisition took place on April 1 Sawyer's revenues and expenses occurred uniformly throughout the year What amounts would appear in a consolidated Income statement for this year? Net income attributable to noncontrolling interest Net income attributable to Parker, Inc. a. January 1 b. April 1
Transcribed Image Text:Parker, Inc., acquires 70 percent of Sawyer Company for $420,000 The remaining 30 percent of Sawyer's outstanding shares continue to trade at a collective value of $174,000. On the acquisition date. Sawyer has the following accounts: Current assets Land Buildings Liabilities Revenues Expenses Book Value $ 210,000 170,000 300,000 (280,000) The buildings have a 10-year remaining life. In addition, Sawyer holds a patent worth $140,000 that has a five-year remaining life but is not recorded on its financial records. At the end of the year, the two companies report the following balances Parker Sawyer $ (900,000) $ (600,000) 600,000 400,000 Combined revenues Combined expenses Consolidated net income Fair Value $ 210,000 180,000 330,000 (280,000) e. Assume that the acquisition took place on January 1. What figures would appear in a consolidated income statement for this year? b. Assume that the acquisition took place on April 1 Sawyer's revenues and expenses occurred uniformly throughout the year What amounts would appear in a consolidated Income statement for this year? Net income attributable to noncontrolling interest Net income attributable to Parker, Inc. a. January 1 b. April 1
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