What financial statement will the non-controlling interest account appear? In the consolidated balance sheet, as an equity account Question 6: on Jan 1 of the year of acquisition, Ashley incorporated pays $300,000 for 60% of Marea Company's outstanding common stock in a purchase transaction. Marea reported common stock on that date of $250,000 with retained earnings of $100,000. Equipment, which had a ten-year remaining life, was undervalued in Marea's financial records by $20,000. During the due diligence process, it was discovered that Marea had a patent that was not on the books but had a market value of $50,000. The patent has a useful life of 10 years. Marea earns income and pays cash dividends: Year Net income Dividends paid Acquisition year 40,000 15,000 First year 60,000 20,000 Second year 90,000 30,000 What is the non-controlling interest in areas of second-year income?
What financial statement will the non-controlling interest account appear? In the consolidated balance sheet, as an equity account Question 6: on Jan 1 of the year of acquisition, Ashley incorporated pays $300,000 for 60% of Marea Company's outstanding common stock in a purchase transaction. Marea reported common stock on that date of $250,000 with retained earnings of $100,000. Equipment, which had a ten-year remaining life, was undervalued in Marea's financial records by $20,000. During the due diligence process, it was discovered that Marea had a patent that was not on the books but had a market value of $50,000. The patent has a useful life of 10 years. Marea earns income and pays cash dividends: Year Net income Dividends paid Acquisition year 40,000 15,000 First year 60,000 20,000 Second year 90,000 30,000 What is the non-controlling interest in areas of second-year income?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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am.103.
Transcribed Image Text:What financial statement will the non-controlling interest account appear?
In the consolidated balance sheet, as an equity account
Question 6: on Jan 1 of the year of acquisition, Ashley incorporated pays $300,000 for 60% of Marea Company's
outstanding common stock in a purchase transaction. Marea reported common stock on that date of $250,000 with
retained earnings of $100,000. Equipment, which had a ten-year remaining life, was undervalued in Marea's financial
records by $20,000. During the due diligence process, it was discovered that Marea had a patent that was not on the
books but had a market value of $50,000. The patent has a useful life of 10 years.
Marea earns income and pays cash dividends:
Year
Net income Dividends paid
Acquisition year 40,000
15,000
First year
60,000
20,000
Second year
90,000
30,000
What is the non-controlling interest in areas of second-year income?
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