ProForm acquired 70 percent of ClipRite on June 30, 2023, for $1,190,000 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 $510,000 at the acquisition date. The 2024 financial statements are as follows: Items Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/24 Totals Note: Parentheses indicate a credit balance. ProForm $ (880,000) 575,000 180,000 (42,000) $ (167,000) $ (1,900,000) (167,000) 180,000 $ (1,887,000) $ 480,000 370,000 1,190,000 1,800,000 (900,000) $ 2,940,000 $ (853,000) (200,000) (1,887,000) $ (2,940,000) ClipRite $ (760,000) 440,000 140,000 0 $ (180,000) $ (930,000) (180,000) 60,000 $ (1,050,000) $ 380,000 780,000 0 1,000,000 (150,000) $ 2,010,000 $ (760,000) (200,000) (1,050,000) $ (2,010,000) ProForm sold ClipRite inventory costing $77,000 during the last six months of 2023 for $136,000. At year-end, 30 percent remained. ProForm sold ClipRite inventory costing $240,000 during 2024 for $330,000. At year-end, 10 percent is left. Required: With these facts, determine the consolidated balances for the following: Note: Input all amounts as positive values.
ProForm acquired 70 percent of ClipRite on June 30, 2023, for $1,190,000 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 $510,000 at the acquisition date. The 2024 financial statements are as follows: Items Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/24 Net income Dividends declared Retained earnings, 12/31/24 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/24 Totals Note: Parentheses indicate a credit balance. ProForm $ (880,000) 575,000 180,000 (42,000) $ (167,000) $ (1,900,000) (167,000) 180,000 $ (1,887,000) $ 480,000 370,000 1,190,000 1,800,000 (900,000) $ 2,940,000 $ (853,000) (200,000) (1,887,000) $ (2,940,000) ClipRite $ (760,000) 440,000 140,000 0 $ (180,000) $ (930,000) (180,000) 60,000 $ (1,050,000) $ 380,000 780,000 0 1,000,000 (150,000) $ 2,010,000 $ (760,000) (200,000) (1,050,000) $ (2,010,000) ProForm sold ClipRite inventory costing $77,000 during the last six months of 2023 for $136,000. At year-end, 30 percent remained. ProForm sold ClipRite inventory costing $240,000 during 2024 for $330,000. At year-end, 10 percent is left. Required: With these facts, determine the consolidated balances for the following: Note: Input all amounts as positive values.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Domestic
Transcribed Image Text:ProForm acquired 70 percent of ClipRite on June 30, 2023, for $1,190,000 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 $510,000 at the acquisition date. The 2024
financial statements are as follows:
Items
Sales
Cost of goods sold
Operating expenses
Dividend income
Net income
Retained earnings, 1/1/24
Net income
Dividends declared
Retained earnings, 12/31/24
Cash and receivables
Inventory
Investment in ClipRite
Fixed assets
Accumulated depreciation
Totals
Liabilities
Common stock
Retained earnings, 12/31/24
Totals
Note: Parentheses indicate a credit balance.
ProForm
$ (880,000)
575,000
180,000
(42,000)
$ (167,000)
$ (1,900,000)
(167,000)
180,000
$ (1,887,000)
$ 480,000
370,000
1,190,000
1,800,000
(900,000)
$ 2,940,000
$ (853,000)
(200,000)
(1,887,000)
$ (2,940,000)
ClipRite
$ (760,000)
440,000
140,000
0
$ (180,000)
$ (930,000)
(180,000)
60,000
$ (1,050,000)
$ 380,000
780,000
0
1,000,000
(150,000)
$ 2,010,000
$ (760,000)
(200,000)
(1,050,000)
$ (2,010,000)
ProForm sold ClipRite inventory costing $77,000 during the last six months of 2023 for $136,000. At year-end, 30 percent remained.
ProForm sold ClipRite inventory costing $240,000 during 2024 for $330,000. At year-end, 10 percent is left.
Required:
With these facts, determine the consolidated balances for the following:
Note: Input all amounts as positive values.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 7 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education