ProForm acquired 70 percent of ClipRite on June 30, 2020, 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 2021 financial statements are as follows:
ProForm acquired 70 percent of ClipRite on June 30, 2020, 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
| ProForm | ClipRite | ||||||
| Sales | $ | (800,000 | ) | $ | (600,000 | ) | |
| Cost of goods sold | 535,000 | 400,000 | |||||
| Operating expenses | 100,000 | 100,000 | |||||
| Dividend income | (35,000 | ) | 0 | ||||
| Net income | $ | (200,000 | ) | $ | (100,000 | ) | |
| $ | (1,300,000 | ) | $ | (850,000 | ) | ||
| Net income | (200,000 | ) | (100,000 | ) | |||
| Dividends declared | 100,000 | 50,000 | |||||
| Retained earnings, 12/31/21 | $ | (1,400,000 | ) | $ | (900,000 | ) | |
| Cash and receivables | $ | 400,000 | $ | 300,000 | |||
| Inventory | 290,000 | 700,000 | |||||
| Investment in ClipRite | 910,000 | 0 | |||||
| Fixed assets | 1,000,000 | 600,000 | |||||
| (300,000 | ) | (200,000 | ) | ||||
| Totals | $ | 2,300,000 | $ | 1,400,000 | |||
| Liabilities | $ | (600,000 | ) | $ | (400,000 | ) | |
| Common stock | (300,000 | ) | (100,000 | ) | |||
| Retained earnings, 12/31/21 | (1,400,000 | ) | (900,000 | ) | |||
| Totals | $ | (2,300,000 | ) | $ | (1,400,000 | ) | |
(Note: Parentheses indicate a credit balance.)
ClipRite sold ProForm inventory costing $72,000 during the last six months of 2020 for $120,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $200,000 during 2021 for $250,000. At year-end, 10 percent is left.
Determine the consolidated balances for the following: (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
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