Revenues Expenses Net income Dividends declared $50,000 Machine 20,000 Other assets Total assets $ 9,000 Common stock 26,000 Retained earnings Total equity $10,000 $35,000 $30,000 $ 5,000 $35,000

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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On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $36,000. Calvin Co. has one recorded asset, a specialized production machine with a book value of $10,000 and no liabilities. The fair value of the machine is $50,000, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of four years. Calvin’s total acquisition-date fair value is $60,000.
At the end of the year, Calvin reports the following in its financial statements:
Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin’s machine (net of accumulated depreciation), and the process trade secret.

Revenues
Expenses
Net income
Dividends declared
$50,000 Machine
20,000 Other assets
Total assets
$ 9,000 Common stock
26,000 Retained earnings
Total equity
$10,000
$35,000
$30,000
$ 5,000
$35,000
Transcribed Image Text:Revenues Expenses Net income Dividends declared $50,000 Machine 20,000 Other assets Total assets $ 9,000 Common stock 26,000 Retained earnings Total equity $10,000 $35,000 $30,000 $ 5,000 $35,000
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