ProForm acquired 60 percent of ClipRite on June 30, 2020, for $1,140,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $15,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $760,000 at the acquisition date. The 2021 financial statements are as follows: Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/21 Totals Sales Cost of Goods Sold ProForm $ (900,000) 585,000 200,000 (48,000) ClipRite $ (800,000) 450,000 150,000 0 $ (163,000) $ (200,000) $ Sales Cost of goods sold $(2,300,000) (163,000) 200,000 $(2,263,000) $ 500,000 390,000 1,140,000 2,000,000 Operating expenses Dividend income Net income attributable to noncontrolling interest Operating Expenses Dividend Income Net Income Attributable to Noncontrolling Interest Inventory Noncontrolling Interest in Subsidiary, 12/31/21 Inventory Noncontrolling interest in subsidiary, 12/31/21 (700,000) $ 3,330,000 $ (667,000) (400,000) (2,263,000) $(3,330,000) (Note: Parentheses indicate a credit balance.) ClipRite sold ProForm inventory costing $79,000 during the last six months of 2020 for $190,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $250,000 during 2021 for $350,000. At year-end, 10 percent is left. Determine the consolidated balances for the following: (Input all amounts as positive values.) X Answer is not complete. (950,000) (200,000) 80,000 $(1,070,000) 400,000 800,000 0 $ $ $ $ $ 1,100,000 (250,000) $ 2,050,000 $ (580,000) (400,000) (1,070,000) $(2,050,000) Consolidated Balance 1,350,000✔ 661,700 365,000 0 $ 1,180,000✔
ProForm acquired 60 percent of ClipRite on June 30, 2020, for $1,140,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $15,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $760,000 at the acquisition date. The 2021 financial statements are as follows: Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/21 Totals Sales Cost of Goods Sold ProForm $ (900,000) 585,000 200,000 (48,000) ClipRite $ (800,000) 450,000 150,000 0 $ (163,000) $ (200,000) $ Sales Cost of goods sold $(2,300,000) (163,000) 200,000 $(2,263,000) $ 500,000 390,000 1,140,000 2,000,000 Operating expenses Dividend income Net income attributable to noncontrolling interest Operating Expenses Dividend Income Net Income Attributable to Noncontrolling Interest Inventory Noncontrolling Interest in Subsidiary, 12/31/21 Inventory Noncontrolling interest in subsidiary, 12/31/21 (700,000) $ 3,330,000 $ (667,000) (400,000) (2,263,000) $(3,330,000) (Note: Parentheses indicate a credit balance.) ClipRite sold ProForm inventory costing $79,000 during the last six months of 2020 for $190,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $250,000 during 2021 for $350,000. At year-end, 10 percent is left. Determine the consolidated balances for the following: (Input all amounts as positive values.) X Answer is not complete. (950,000) (200,000) 80,000 $(1,070,000) 400,000 800,000 0 $ $ $ $ $ 1,100,000 (250,000) $ 2,050,000 $ (580,000) (400,000) (1,070,000) $(2,050,000) Consolidated Balance 1,350,000✔ 661,700 365,000 0 $ 1,180,000✔
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:ProForm acquired 60 percent of ClipRite on June 30, 2020, for $1,140,000 in cash. Based on ClipRite's acquisition-date fair value, an
unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $15,000 per year. No goodwill was
recognized in the acquisition. The noncontrolling interest fair value was assessed at $760,000 at the acquisition date. The 2021
financial statements are as follows:
Sales
Cost of goods sold
Operating expenses
Dividend income
Net income
Retained earnings, 1/1/21
Net income
Dividends declared
Retained earnings, 12/31/21
Cash and receivables
Inventory
Investment in ClipRite
Fixed assets
Accumulated depreciation
Totals
Liabilities
Common stock
Retained earnings, 12/31/21
Totals
Sales
Cost of Goods Sold
ProForm
(900,000)
585,000
200,000
(48,000)
$ (163,000)
$
$ 500,000
390,000
1,140,000
2,000,000
(700,000)
$ 3,330,000
$ (667,000)
(400,000)
(2,263,000)
$ (3,330,000)
Sales
Cost of goods sold
Operating expenses
Dividend income
Net income attributable to noncontrolling interest
Inventory
Noncontrolling interest in subsidiary, 12/31/21
$(2,300,000) $
(163,000)
200,000
$(2,263,000)
Operating Expenses
Dividend Income
Net Income Attributable to Noncontrolling Interest
Inventory
Noncontrolling Interest in Subsidiary, 12/31/21
X Answer is not complete.
ClipRite
$ (800,000)
450,000
150,000
0
(Note: Parentheses indicate a credit balance.)
ClipRite sold ProForm inventory costing $79,000 during the last six months of 2020 for $190,000. At year-end, 30 percent remained.
ClipRite sold ProForm inventory costing $250,000 during 2021 for $350,000. At year-end, 10 percent is left.
Determine the consolidated balances for the following: (Input all amounts as positive values.)
$ (200,000)
(950,000)
(200,000)
80,000
$
$
$
$
$(1,070,000)
400,000
800,000
0
$
1,100,000
(250,000)
$ 2,050,000
$ (580,000)
(400,000)
(1,070,000)
$(2,050,000)
Consolidated
Balance
1,350,000
661,700
365,000
$ 1,180,000
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Step 1: Define consolidated Income statement
VIEWStep 2: Working note for sales, cost of goods sold, operating expenses, and inventory
VIEWStep 3: Showing working note for Noncontrolling interest in subsidiary,12/31/21 (working Note 2)
VIEWStep 4: Calculation of Net Income attribute to noncontrolling interest
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