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ProForm acquired 70 percent of ClipRite on June 30, 2023, 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 2024 financial statements are as follows:

ProForm acquired 70 percent of ClipRite on June 30, 2023, 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 2024 financial statements are as follows:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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ProForm acquired 70 percent of ClipRite on June 30, 2023, 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 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 $ (800,000) 535,000 100,000 (35,000) $ (200,000) $ (1,300,000) (200,000) 100,000 $ (1,400,000) $ 400,000 290,000 910,000 1,000,000 (300,000) $ 2,300,000 Sales Cost of goods sold Operating expenses Dividend income Net income attributable to noncontrolling interest Inventory Noncontrolling interest in subsidiary, 12/31/24 ClipRite $ (600,000) 400,000 100,000 $ (100,000) $ (850,000) (100,000) 50,000 $ (900,000) $ 300,000 700,000 0 Answer is complete but not entirely correct. Consolidated Balance 600,000 (200,000) $ 1,400,000 $ (400,000) (100,000) (900,000) $ (600,000) (300,000) (1,400,000) $ (2,300,000) $ (1,400,000) ClipRite sold ProForm inventory costing $72,000 during the last six months of 2023 for $120,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $200,000 during 2024 for $250,000. 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. $ 1,150,000✔ $ 675,600✔ $ 210,000✔ $ $ $ $ 27,000 X 985,000✔ 355,500 ×
Transcribed Image Text:ProForm acquired 70 percent of ClipRite on June 30, 2023, 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 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 $ (800,000) 535,000 100,000 (35,000) $ (200,000) $ (1,300,000) (200,000) 100,000 $ (1,400,000) $ 400,000 290,000 910,000 1,000,000 (300,000) $ 2,300,000 Sales Cost of goods sold Operating expenses Dividend income Net income attributable to noncontrolling interest Inventory Noncontrolling interest in subsidiary, 12/31/24 ClipRite $ (600,000) 400,000 100,000 $ (100,000) $ (850,000) (100,000) 50,000 $ (900,000) $ 300,000 700,000 0 Answer is complete but not entirely correct. Consolidated Balance 600,000 (200,000) $ 1,400,000 $ (400,000) (100,000) (900,000) $ (600,000) (300,000) (1,400,000) $ (2,300,000) $ (1,400,000) ClipRite sold ProForm inventory costing $72,000 during the last six months of 2023 for $120,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $200,000 during 2024 for $250,000. 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. $ 1,150,000✔ $ 675,600✔ $ 210,000✔ $ $ $ $ 27,000 X 985,000✔ 355,500 ×
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