On January 1, 2023, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Incorporated, for $810,000in cash and stock options. At the acquisition date. NetSpeed had common stock of $800,000 and Retained Earnings of $40,000. Theacquisition-dete fair value of the 10 percent noncontrolling interest was $90.000. QuickPort attributed the $60.000 excess ofNetSpeed's fair value over book value to a database with a five-year remaining lifeDuring the next two years, NetSpeed reported the followingIncome8,000DividendsDeclaredOn July 1, 2023, QuickPort sold communication equipment to NetSpeed for $42.000. The equipment originally cost $48,000 and hadaccumulated depreciation of $9,000 and an estimated remaining life of three years at the date of the intra-entity transferRequired:Compute the equity method balance in QuickPort's Investment in NetSpeed, incorporated, account as of December 31, 2024.b. Prepere the worksheet adjustments for the December 31, 2024, consolidation of QuickPort and NetSpeedCompute the equity method balance in QuickPort's Investment in NetSpeed, Incorporated, account as of December 31, 2024.Investment in NetSpeed, Incorporated, 12/31/241 Prepare entry "TA2 Prepare entry SPrepare entry A4 Prepare entry I5 Prepare entry D6 Prepare entry E7 Prepare entry ED

Investment:It refers to the process of using the currently held excess cash to earn profitable…

Required: a.Compute the equity method balance in QuickPort's Investment in NetSpeed, Incorporated, account as of December 31, 2024 b. Prepere the worksheet adjustments for the December 31, 2024, consolidation of QuickPort and NetSpeed

Required: a.Compute the equity method balance in QuickPort's Investment in NetSpeed, Incorporated, account as of December 31, 2024 b. Prepere the worksheet adjustments for the December 31, 2024, consolidation of QuickPort and NetSpeed

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On January 1, 2023, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Incorporated, for $810,000
in cash and stock options. At the acquisition date. NetSpeed had common stock of $800,000 and Retained Earnings of $40,000. The
acquisition-dete fair value of the 10 percent noncontrolling interest was $90.000. QuickPort attributed the $60.000 excess of
NetSpeed's fair value over book value to a database with a five-year remaining life
During the next two years, NetSpeed reported the following
Income
8,000
Dividends
Declared
On July 1, 2023, QuickPort sold communication equipment to NetSpeed for $42.000. The equipment originally cost $48,000 and had
accumulated depreciation of $9,000 and an estimated remaining life of three years at the date of the intra-entity transfer
Required:
Compute the equity method balance in QuickPort's Investment in NetSpeed, incorporated, account as of December 31, 2024.
b. Prepere the worksheet adjustments for the December 31, 2024, consolidation of QuickPort and NetSpeed
Compute the equity method balance in QuickPort's Investment in NetSpeed, Incorporated, account as of December 31, 2024.
Investment in NetSpeed, Incorporated, 12/31/24
1 Prepare entry "TA
2 Prepare entry S
Prepare entry A
4 Prepare entry I
5 Prepare entry D
6 Prepare entry E
7 Prepare entry ED

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