Pea Company purchased 70 percent of Split Company's stock approximately 20 years ago. On December 31, 20X8, Pea purchased abuilding from Split for $300,000. Split had purchased the building on January 1, 20X1, at a cost of $400,000 and used straight-linedepreciation on an expected life of 20 years. The asset's total estimated economic life is unchanged as a result of the intercompanysale.Required:a. What amount of depreciation expense on the building will Pea report for 20X9?Answer is complete but not entirely correct.Annual depreciation expense reported by Pea S 33,333d. What amount of income will be assigned to the noncontrolling interest in the consolidated income statement for 20X9 if Splitreports net income of $ 40,000 for 20X9?Income assigned to noncontrolling intereste. Split reports assets with a book value of $ 350,000 and liabilities of $ 150,000 at January 1, 20X9, and reports net income of $40,000 and dividends of $ 15,000 for 20X9. What amount will be assigned to the noncontrolling interest in the consolidatedbalance sheet at December 31, 20X9, assuming the fair value of the noncontrolling interest at the date of acquisition was equal to30 percent of Split Company's book value?Amount assigned to noncontrolling interest

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Pea Company purchased 70 percent of Split Company's stock a building from Split for $300,000. Split had purchased the buildi depreciation on an expected life of 20 years. The asset's total e sale. Required: a. What amount of depreciation expense on the building will Pe Answer is complete but not entirely correct. Annual depreciation expense reported by Pea $ 33,333

Pea Company purchased 70 percent of Split Company's stock a building from Split for $300,000. Split had purchased the buildi depreciation on an expected life of 20 years. The asset's total e sale. Required: a. What amount of depreciation expense on the building will Pe Answer is complete but not entirely correct. Annual depreciation expense reported by Pea $ 33,333

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

Pea Company purchased 70 percent of Split Company's stock approximately 20 years ago. On December 31, 20X8, Pea purchased a
building from Split for $300,000. Split had purchased the building on January 1, 20X1, at a cost of $400,000 and used straight-line
depreciation on an expected life of 20 years. The asset's total estimated economic life is unchanged as a result of the intercompany
sale.
Required:
a. What amount of depreciation expense on the building will Pea report for 20X9?
Answer is complete but not entirely correct.
Annual depreciation expense reported by Pea S 33,333
d. What amount of income will be assigned to the noncontrolling interest in the consolidated income statement for 20X9 if Split
reports net income of $ 40,000 for 20X9?
Income assigned to noncontrolling interest
e. Split reports assets with a book value of $ 350,000 and liabilities of $ 150,000 at January 1, 20X9, and reports net income of $
40,000 and dividends of $ 15,000 for 20X9. What amount will be assigned to the noncontrolling interest in the consolidated
balance sheet at December 31, 20X9, assuming the fair value of the noncontrolling interest at the date of acquisition was equal to
30 percent of Split Company's book value?
Amount assigned to noncontrolling interest

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