On January 1, 2012, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc.,

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On January 1, 2012, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $810,000 in cash and stock options. At the acquisition date, Net-Speed had common stock of $800,000 and Retained Earnings of $40,000. The acquisition date fair value of the 10 percent noncontrolling interest was $90,000. QuickPort attributed the $60,000 excess of NetSpeed's fair value over book value to a database with a 5-year remaining life.
During the next two years, NetSpeed reported the following:
______________________Income ____________Dividends
2012...........................$ 80,000 ..................$8,000
2013............................115,000 ....................8,000
On July 1, 2012, 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.
a. Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2013.
b. Prepare the worksheet adjustments for the December 31, 2013, consolidation of QuickPort and NetSpeed.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Fundamentals of Advanced Accounting

ISBN: 978-0077667061

5th edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

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