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The following balances were taken from the records of Oriole Company: Sheffield Company purchased 75\% of Oriole Company's common stock on January 1, 2021 for $902,100. The difference between implied value and book value is attributable to assets with a remaining useful life on January 1, 2023 of ten years. Assuming the economic unit theory: 1. Compute noncontrolling interest in consolidated income for 2023. 2. Compute noncontrolling interest in net assets on December 31, 2023. 1. Noncontrolling interest in consolidated income $ 2. Noncontrolling interest in net assets $ Assume that Crane Homes feels that it must earn a 15% return on its investment, but that average excess earnings are to be capitalized for three years only. Based on these assumptions, calculate a reasonable offering price for Novak, Inc. Indicate how much of the price consists of goodwill. Ignore tax effects. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places e.g. 58,971.) Goodwill $ Offering price $ Assume that Sheridan feels that it must earn a 20% return on its investment, and that goodwill is determined by capitalizing excess earnings. Based on these assumptions, calculate a reasonable offering price for Pina, Inc. Indicate how much of the price consists of goodwill. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places e.g. 58,971.) Goodwill $ Offering price $ Assume that Sheridan feels that it must earn a 15% return on its investment, but that average excess earnings are to be capitalized for five years only. Based on these assumptions, calculate a reasonable offering price for Pina, Inc. Indicate how much of the price consists of goodwill. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places e.g. 58,971.) Goodwill $ Offering price $ Sheridan Company is considering the acquisition of Pina, Inc. To assess the amount it might be willing to pay, Sheridan makes the following computations and assumptions. A. Pina, Inc. has identifiable assets with a total fair value of $6,012,000 and liabilities of $3,710,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 25% higher than book value, and land with a fair value 50% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Pina, Inc. B. Pina, Inc.'s pretax incomes for the years 2020 through 2022 were $473,900,$573,800, and $373,100, respectively. Sheridan believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments for the following items included in pretax earnings: C. The normal rate of return on net assets for the industry is 15%. Your answer is incorrect. Compute the difference between cost/(implied) and book value applying: 1. Parent company theory. 2. Economic unit theory. Assume further that Crane Homes feels that it must earn a 25% return on its investment and that goodwill is determined by capitalizing excess earnings. Based on these assumptions, calculate a reasonable offering price for Novak, Inc. Indicate how much of the price consists of goodwill. Ignore tax effects. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places e.g. 58,971 .) Goodwill $ Offering price $ Crane Homes Company is considering the acquisition of Novak, Inc. early in 2025. To assess the amount, it might be willing to pay, Crane Homes makes the following computations and assumptions. A. Novak, Inc. has identifiable assets with a total fair value of $15,017,000 and liabilities of $8,822,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 30% higher than book value, and land with a fair value 75% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Novak, Inc. B. Novak, Inc.'s pretax incomes for the years 2022 through 2024 were $1,200,800,$1,501,600, and $954,000, respectively. Crane Homes believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments to the following items included in pretax earnings: C. The normal rate of return on net assets for the industry is 15%. The following balances were taken from the records of Oriole Company: Sheffield Company purchased 75\% of Oriole Company's common stock on January 1, 2021 for $902,100. The difference between implied value and book value is attributable to assets with a remaining useful life on January 1, 2023 of ten years. Assuming the economic unit theory: 1. Compute noncontrolling interest in consolidated income for 2023. 2. Compute noncontrolling interest in net assets on December 31, 2023. 1. Noncontrolling interest in consolidated income $ 2. Noncontrolling interest in net assets $ Assume that Crane Homes feels that it must earn a 15% return on its investment, but that average excess earnings are to be capitalized for three years only. Based on these assumptions, calculate a reasonable offering price for Novak, Inc. Indicate how much of the price consists of goodwill. Ignore tax effects. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places e.g. 58,971.) Goodwill $ Offering price $ Assume that Sheridan feels that it must earn a 20% return on its investment, and that goodwill is determined by capitalizing excess earnings. Based on these assumptions, calculate a reasonable offering price for Pina, Inc. Indicate how much of the price consists of goodwill. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places e.g. 58,971.) Goodwill $ Offering price $ Assume that Sheridan feels that it must earn a 15% return on its investment, but that average excess earnings are to be capitalized for five years only. Based on these assumptions, calculate a reasonable offering price for Pina, Inc. Indicate how much of the price consists of goodwill. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places e.g. 58,971.) Goodwill $ Offering price $ Sheridan Company is considering the acquisition of Pina, Inc. To assess the amount it might be willing to pay, Sheridan makes the following computations and assumptions. A. Pina, Inc. has identifiable assets with a total fair value of $6,012,000 and liabilities of $3,710,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 25% higher than book value, and land with a fair value 50% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Pina, Inc. B. Pina, Inc.'s pretax incomes for the years 2020 through 2022 were $473,900,$573,800, and $373,100, respectively. Sheridan believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments for the following items included in pretax earnings: C. The normal rate of return on net assets for the industry is 15%. Your answer is incorrect. Compute the difference between cost/(implied) and book value applying: 1. Parent company theory. 2. Economic unit theory. Assume further that Crane Homes feels that it must earn a 25% return on its investment and that goodwill is determined by capitalizing excess earnings. Based on these assumptions, calculate a reasonable offering price for Novak, Inc. Indicate how much of the price consists of goodwill. Ignore tax effects. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places e.g. 58,971 .) Goodwill $ Offering price $ Crane Homes Company is considering the acquisition of Novak, Inc. early in 2025. To assess the amount, it might be willing to pay, Crane Homes makes the following computations and assumptions. A. Novak, Inc. has identifiable assets with a total fair value of $15,017,000 and liabilities of $8,822,000. The assets include office equipment with a fair value approximating book value, buildings with a fair value 30% higher than book value, and land with a fair value 75% higher than book value. The remaining lives of the assets are deemed to be approximately equal to those used by Novak, Inc. B. Novak, Inc.'s pretax incomes for the years 2022 through 2024 were $1,200,800,$1,501,600, and $954,000, respectively. Crane Homes believes that an average of these earnings represents a fair estimate of annual earnings for the indefinite future. However, it may need to consider adjustments to the following items included in pretax earnings: C. The normal rate of return on net assets for the industry is 15%