On January 1, 2023, French Company acquired 60 percent of K-Tech Company for $318,000 when K-Tech's book value was$418,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $212,000. At the acquisitiondate, K-Tech's trademark (10-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology(5-year remaining life) was undervalued by $32,000.In 2023, K-Tech reports $24,000 net income and declares no dividends. At the end of 2024, the two companies report thefollowing figures (stockholders' equity accounts have been omitted):ItemsCurrent assetsTrademarksPatented technologyLiabilitiesRevenuesExpensesInvestment income.French CompanyCarrying Amounts$ 632,000272,000422,000(402,000)(912,000)488,000Not givenK-Tech Company K-Tech CompanyCarrying Amounts Fair Values$ 332,000$ 312,000212,000162,000(132,000)(412,000)312,000e292,000194,000(132,000)eee a. Compute the 2024 consolidated net income before allocation to the controlling and noncontrolling interests.b. In 2024, assuming K-Tech has declared no dividends, compute the noncontrolling interest's share of the subsidiary's incomeand the ending balance of the noncontrolling interest in the subsidiary.c. Compute the amount reported for trademarks in the 2024 consolidated balance sheetAnswer is complete but not entirely correct.a. Consolidated net incomeb(1). Noncontrolling interest's share of the subsidiary's incomeb(2). Noncontrolling interest at end of 2024c. Consolidated trademarks$$$$502,4009,600221,600964,000

uary 1, 2023, French Company acquired 60 percent of K-Tech Company for $318,000 when K-Tech's book value was $418,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $212,000. At the acquisition date, K-Tech's trademark (10-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (5-year remaining life) was undervalued by $32,000. In 2023, K-Tech reports $24,000 net income and declares no dividends. At the end of 2024, the two companies report the following figures (stockholders' equity accounts have been omitted): Items Current assets Trademarks Patented technology Liabilities Revenues Expenses iss French Company Carrying Amounts $ 632,000 272,000 422,000 (402,000) (912,000) 488,000 K-Tech Company K-Tech Company Carrying Amounts Fair Values $ 332,000 292,000 194,000 (132,000) $ 312,000 212,000 162,000 (132,000) (412,000) 312,000

uary 1, 2023, French Company acquired 60 percent of K-Tech Company for $318,000 when K-Tech's book value was $418,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $212,000. At the acquisition date, K-Tech's trademark (10-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (5-year remaining life) was undervalued by $32,000. In 2023, K-Tech reports $24,000 net income and declares no dividends. At the end of 2024, the two companies report the following figures (stockholders' equity accounts have been omitted): Items Current assets Trademarks Patented technology Liabilities Revenues Expenses iss French Company Carrying Amounts $ 632,000 272,000 422,000 (402,000) (912,000) 488,000 K-Tech Company K-Tech Company Carrying Amounts Fair Values $ 332,000 292,000 194,000 (132,000) $ 312,000 212,000 162,000 (132,000) (412,000) 312,000

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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