Chapter 4, Problem 14P

On January 1, 2023, French Company acquired 60 percent of K-Tech Company for $342,000 when K-Tech's book value was $442,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $228,000. 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 $48,000. In 2023, K-Tech reports $8,000 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 French Company Carrying Amounts $ 644,000 284,000 434,000 (414,000) K-Tech Company Carrying Amounts $ 324,000 224,000 174,000 K-Tech Company Fair Values $ 344,000 304,000 222,000 (144,000) Revenues Expenses Investment income (144,000) (924,000) (424,000) 476,000 324,000 Not given 0 Note: Parentheses indicate a credit…

On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $300,000 when K-Tech's book value was $400,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $200,000. At the acquisition date, K-Tech's trademark (10-year remaining life) was undervalued in its financial records by $60,000. Also, patented technology (5-year remaining life) was undervalued by $40,000. In 2020, K-Tech reports $30,000 net income and declares no dividends. At the end of 2021, the two companies report the following figures (stockholders' equity accounts have been omitted): К-Теch Company Fair Values French Company Carrying Amounts К-Тech Company Carrying Amounts Current $ 620,000 $ 300,000 $ 320,000 assets Trademarks Patented 260,000 200,000 280,000 410,000 150,000 190,000 technology Liabilities Revenues Expenses Investment income (390,000) (900,000) 500,000 (120,000) (400,000) 300,000 (120,000) Not given Note: Parentheses indicate a credit balance. Vhat…

On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $306,000 when K-Tech’s book value was $406,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $204,000. 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 $24,000.   In 2020, K-Tech reports $28,000 net income and declares no dividends. At the end of 2021, the two companies report the following figures (stockholders’ equity accounts have been omitted):     French CompanyCarrying Amounts   K-Tech CompanyCarrying Amounts   K-Tech CompanyFair Values   Current assets $ 624,000     $ 304,000     $ 324,000     Trademarks   264,000       204,000       284,000     Patented technology   414,000       154,000       178,000     Liabilities   (394,000 )     (124,000 )     (124,000 )   Revenues   (904,000 )     (404,000 )…