ProForm acquired 60 percent of ClipRite on June 30, 2020, for $660,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $720,000 was recognized and is being amortized at the rate of $18,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $440,000 at the acquisition date. The 2021 financial statements are as follows:
ProForm acquired 60 percent of ClipRite on June 30, 2020, for $660,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $720,000 was recognized and is being amortized at the rate of $18,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $440,000 at the acquisition date. The 2021 financial statements are as follows:
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 19E
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Question
![ProForm acquired 60 percent of ClipRite on June 30, 2020, for $660,000 in cash. Based on ClipRite's acquisition-date fair value, an
unrecorded intangible of $720,000 was recognized and is being amortized at the rate of $18,000 per year. No goodwill was
recognized in the acquisition. The noncontrolling interest fair value was assessed at $440,000 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
ProForm
(930,000)
600,000
230,000
(30,000)
$ (130,000) $ (230,000)
Sales
Cost of Goods Sold
Operating Expenses
$(1,700,000)
(130,000)
230,000
$(1,600,000)
ClipRite
(860,000)
465,000
165,000
0
$ (980,000)
(230,000)
50,000
$(1,160,000)
$ 530,000 $ 430,000
830,000
0
420,000
660,000
1,200,000
(200,000)
1,250,000
(400,000)
$ 2,610,000
$ 2,110,000
$ (310,000) $ (250,000)
(700,000)
(1,600,000)
(700,000)
(1,160,000)
$(2,610,000)
$(2,110,000)
(Note: Parentheses indicate a credit balance.)
ProForm sold ClipRite inventory costing $82,000 during the last six months of 2020 for $220,000. At year-end, 30 percent remained.
ProForm sold ClipRite Inventory costing $265,000 during 2021 for $380,000. At year-end, 10 percent is left.
Determine the consolidated balances for the following accounts: (Input all amounts as positive values.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb9eb052b-0c42-425f-80d7-ea5c1f6fa7cb%2F22147d4e-fa88-4656-848a-7d03553153ab%2F913ochk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:ProForm acquired 60 percent of ClipRite on June 30, 2020, for $660,000 in cash. Based on ClipRite's acquisition-date fair value, an
unrecorded intangible of $720,000 was recognized and is being amortized at the rate of $18,000 per year. No goodwill was
recognized in the acquisition. The noncontrolling interest fair value was assessed at $440,000 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
ProForm
(930,000)
600,000
230,000
(30,000)
$ (130,000) $ (230,000)
Sales
Cost of Goods Sold
Operating Expenses
$(1,700,000)
(130,000)
230,000
$(1,600,000)
ClipRite
(860,000)
465,000
165,000
0
$ (980,000)
(230,000)
50,000
$(1,160,000)
$ 530,000 $ 430,000
830,000
0
420,000
660,000
1,200,000
(200,000)
1,250,000
(400,000)
$ 2,610,000
$ 2,110,000
$ (310,000) $ (250,000)
(700,000)
(1,600,000)
(700,000)
(1,160,000)
$(2,610,000)
$(2,110,000)
(Note: Parentheses indicate a credit balance.)
ProForm sold ClipRite inventory costing $82,000 during the last six months of 2020 for $220,000. At year-end, 30 percent remained.
ProForm sold ClipRite Inventory costing $265,000 during 2021 for $380,000. At year-end, 10 percent is left.
Determine the consolidated balances for the following accounts: (Input all amounts as positive values.)
![Determine the consolidated balances for the following accounts: (Input all amounts as positive values.)
Sales
Cost of Goods Sold
Operating Expenses
Dividend Income
Net Income Attributable to Noncontrolling Interest
Inventory
Noncontrolling Interest in Subsidiary, 12/31/21
Answer is complete but not entirely correct.
Sales
Cost of goods sold
Operating expenses
Dividend income
Net income attributable to noncontrolling
interest
Inventory
Noncontrolling interest in subsidiary, 12/31/21
Consolidated
Balance
$
$
$
$
$
$
$
1,410,000
655,100
413,000
10
96,760
1,238,500
948,600](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb9eb052b-0c42-425f-80d7-ea5c1f6fa7cb%2F22147d4e-fa88-4656-848a-7d03553153ab%2Fe0tdsnc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Determine the consolidated balances for the following accounts: (Input all amounts as positive values.)
Sales
Cost of Goods Sold
Operating Expenses
Dividend Income
Net Income Attributable to Noncontrolling Interest
Inventory
Noncontrolling Interest in Subsidiary, 12/31/21
Answer is complete but not entirely correct.
Sales
Cost of goods sold
Operating expenses
Dividend income
Net income attributable to noncontrolling
interest
Inventory
Noncontrolling interest in subsidiary, 12/31/21
Consolidated
Balance
$
$
$
$
$
$
$
1,410,000
655,100
413,000
10
96,760
1,238,500
948,600
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