ProForm acquired 70 percent of ClipRite on June 30, 2017, for $910,000 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 $10,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2018 financial statements are as follows: ProForm ClipRite $ (800,000) $ (600,000) 535,000 Sales Cost of goods sold Operating expenses 400,000 100,000 100,000 (35,000) $ (200,000) $ (100,000) $ (1,300,000) $ (850,000) (200,000) 100,000 Dividend income -0- Net income Retained earnings, 1/1/18 (100,000) 50,000 Net income Dividends declared Retained earnings, 12/31/18 $ (1,400,000) $ (900,000) Cash and receivables $ 400,000 $ 300,000 Inventory ..... Investment in ClipRite. 290,000 700,000 910,000 -0- Fixed assets 1,000,000 600,000 Accumulated depreciation (300,000) $ 2,300,000 $ 1,400,000 (200,000) Totals $ (600,000) $ (400,000) (300,000) (1,400,000) Liabilities Common stock (100,000) Retained earnings, 12/31/18 (900,000) Totals $ (2,300,000) $(1,400,000) ProForm sold ClipRite inventory costing $72,000 during the last six months of 2017 for $120,000. At year-end, 30 percent remained. ProForm sells ClipRite inventory costing $200,000 during 2018 for $250,000. At year-end, 10 percent is left. With these facts, determine the consolidated balances for the following: Sales Cost of Goods Sold Operating Expenses Dividend Income Net Income Attributable to Noncontrolling Interest Inventory Noncontrolling Interest in Subsidiary, 12/31/18

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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ProForm acquired 70 percent of ClipRite on June 30, 2017, for
$910,000 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 $10,000 per year. No goodwill was
recognized in the acquisition.
The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2018
financial statements are as follows:
ProForm
ClipRite
$ (800,000) $ (600,000)
400,000
Sales
Cost of goods sold
Operating expenses
535,000
100,000
100,000
Dividend income
(35,000)
$ (200,000) $ (100,000)
-0-
Net income
$ (1,300,000) $ (850,000)
(100,000)
50,000
Retained earnings, 1/1/18
Net income
(200,000)
Dividends declared
100,000
Retained earnings, 12/31/18
$ (1,400,000) $ (900,000)
$ 400,000
$ 300,000
700,000
Cash and receivables
Inventory ....
Investment in ClipRite.
290,000
910,000
-0-
Fixed assets
1,000,000
600,000
Accumulated depreciation
(300,000)
$ 2,300,000
(200,000)
Totals
$1,400,000
$ (600,000) $ (400,000)
(300,000)
Liabilities
Common stock
(100,000)
Retained earnings, 12/31/18
(1,400,000)
$ (2,300,000) $(1,400,000)
(900,000)
Totals
ProForm sold ClipRite inventory costing $72,000 during the last
six months of 2017 for $120,000. At year-end, 30 percent
remained. ProForm sells ClipRite inventory costing $200,000
during 2018 for $250,000. At year-end, 10 percent is left. With
these facts, determine the consolidated balances for the
following: Sales Cost of Goods Sold Operating Expenses
Dividend Income Net Income Attributable to Noncontrolling
Interest Inventory Noncontrolling Interest in Subsidiary, 12/31/18
Transcribed Image Text:ProForm acquired 70 percent of ClipRite on June 30, 2017, for $910,000 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 $10,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $390,000 at the acquisition date. The 2018 financial statements are as follows: ProForm ClipRite $ (800,000) $ (600,000) 400,000 Sales Cost of goods sold Operating expenses 535,000 100,000 100,000 Dividend income (35,000) $ (200,000) $ (100,000) -0- Net income $ (1,300,000) $ (850,000) (100,000) 50,000 Retained earnings, 1/1/18 Net income (200,000) Dividends declared 100,000 Retained earnings, 12/31/18 $ (1,400,000) $ (900,000) $ 400,000 $ 300,000 700,000 Cash and receivables Inventory .... Investment in ClipRite. 290,000 910,000 -0- Fixed assets 1,000,000 600,000 Accumulated depreciation (300,000) $ 2,300,000 (200,000) Totals $1,400,000 $ (600,000) $ (400,000) (300,000) Liabilities Common stock (100,000) Retained earnings, 12/31/18 (1,400,000) $ (2,300,000) $(1,400,000) (900,000) Totals ProForm sold ClipRite inventory costing $72,000 during the last six months of 2017 for $120,000. At year-end, 30 percent remained. ProForm sells ClipRite inventory costing $200,000 during 2018 for $250,000. At year-end, 10 percent is left. With these facts, determine the consolidated balances for the following: Sales Cost of Goods Sold Operating Expenses Dividend Income Net Income Attributable to Noncontrolling Interest Inventory Noncontrolling Interest in Subsidiary, 12/31/18
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