Assume that, on January 1, 2013, a P Company acquired an 80 interest in its subsidiary for a purchase price that was $250,000 over the book value of the S Companys Stockholders Equity on the acquisition date The parent allocated the excess to the following A assets A Asset Initial Fair Value Useful Life (years) PPE, net $ 50,000 10 Customer List 75,000 10 Goodwill 125000 Indefinite $250,000 P Company and S Company report the following financial statements at December 31, 2017 Income Statement Parent Subsidiary Sales $ 7,330,000 $ 935,250 Cost of goods sold (5,131,000) (561,150) Gross Profit 2,199,000 374,100 Equity income 92,248 Operating expenses (1,392,700) (243,165) Net income $ 898,548 $ 130,935 Statement of Retained Earnings Parent Subsidiary BOY Retained Earnings $3,682,592 $483,213 Net income 898,548 130,935 Dividends (199,159) (19,641) EOY Retained Earnings $4,381,981 $594,507 Balance Sheet Parent Subsidiary Assets Cash $ 411,313 $ 65,756 Accounts receivable 938,240 216,978 Inventory 1,422,020 278,705 Equity Investment 1,378,423 PPE, net 5,374,356 640,335 $9,524,352 $1,201,773 Liabilities and Stockholders Equity Current Liabilities $1,053,321 $ 216,978 Long term Liabilities 2,000,000 500,000 Common Stock 1,198,455 62,350 APIC 890,595 77,938 Retained Earnings 4,381,981 594,507 $9,524,352 $1,201,773 Topic Allocation of Profit to Controlling Interest LO 2 Based on the given financial statements, the computation of the equity income of $92,248 reported by the parent includes a deduction for Amount attributed to depreciation and amortization, $35,000 Amount attributed to noncontrolling interest, $21,187 Dividends declared and paid by S Company, $25,000 Goodwill amortization, $20,000 Topic Apportionment of Goodwill in the Presence of Noncontrolling Interests LO 1 The EOY Equity Investment balance of $1,378,423 (4 years subsequent to the acquisition) includes Dividends of $247,400 Goodwill allocation of $200,000 Goodwill allocation of $125,000 BOY A assets excluding Goodwill, $200,000

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Assume that, on January 1, 2013, a P Company acquired an 80% interest in its subsidiary for a purchase price that was $250,000 over the

Assume that, on January 1, 2013, a P Company acquired an 80% interest in its subsidiary for a purchase price that was $250,000 over the book value of the S Companys Stockholders Equity on the acquisition date. The parent allocated the excess to the following [A] assets:

[A] Asset	Initial Fair Value	Useful Life (years)
PPE, net	$ 50,000	10
Customer List	75,000	10
Goodwill	125000	Indefinite
	$250,000

P Company and S Company report the following financial statements at December 31, 2017:

Income Statement
	Parent	Subsidiary
Sales	$ 7,330,000	$ 935,250
Cost of goods sold	(5,131,000)	(561,150)
Gross Profit	2,199,000	374,100
Equity income	92,248
Operating expenses	(1,392,700)	(243,165)
Net income	$ 898,548	$ 130,935
Statement of Retained Earnings
	Parent	Subsidiary
BOY Retained Earnings	$3,682,592	$483,213
Net income	898,548	130,935
Dividends	(199,159)	(19,641)
EOY Retained Earnings	$4,381,981	$594,507

Balance Sheet
	Parent	Subsidiary
Assets:
Cash	$ 411,313	$ 65,756
Accounts receivable	938,240	216,978
Inventory	1,422,020	278,705
Equity Investment	1,378,423
PPE, net	5,374,356	640,335
	$9,524,352	$1,201,773
Liabilities and Stockholders Equity:
Current Liabilities	$1,053,321	$ 216,978
Long-term Liabilities	2,000,000	500,000
Common Stock	1,198,455	62,350
APIC	890,595	77,938
Retained Earnings	4,381,981	594,507
	$9,524,352	$1,201,773

Topic: Allocation of Profit to Controlling Interest LO: 2

Based on the given financial statements, the computation of the equity income of $92,248 reported by the parent includes a deduction for:
1. Amount attributed to depreciation and amortization, $35,000
2. Amount attributed to noncontrolling interest, $21,187
3. Dividends declared and paid by S Company, $25,000
4. Goodwill amortization, $20,000

Topic: Apportionment of Goodwill in the Presence of Noncontrolling Interests LO: 1

The EOY Equity Investment balance of $1,378,423 (4 years subsequent to the acquisition) includes:
1. Dividends of $247,400
2. Goodwill allocation of $200,000
3. Goodwill allocation of $125,000
4. BOY [A] assets excluding Goodwill, $200,000