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Both companies have a December 31 year-end. At the date of acquisition, San Jose's reported net assets had book values approximating fair value. However, it
Both companies have a December 31 year-end. At the date of acquisition, San Jose's reported net assets had book values approximating fair value. However, it had previously unreported indefinitelife identifiable intangibles valued at $65 million, meeting ASC Topic 805 requirements for capitalization. Impairment losses in 2023 for identifiable intangibles were $500,000. Goodwill from this acquisition was not impaired in 2023. San jose reported net income of $3 million in 2023, and paid no dividends. Playtel uses the complete equity method to report its investment in San Jose on its own books. Required a. Calculate the original amount of goodwill for this acquisition and its allocation to the controlling and noncontrolling interest (in thousands). b. Calculate equity in net income of San Jose, reported on Playtel's books in 2023, and noncontrolling interest in net income, reported on the consolidated income statement (in thousands). Use negative signs with answers that reduce net income amounts. c. Prepare eliminating entries (C), (E), (R), (O) and (N), required to consolidate Playtel's trial balance accounts with those of San Jose on December 31,2023 (in thousands). Both companies have a December 31 year-end. At the date of acquisition, San Jose's reported net assets had book values approximating fair value. However, it had previously unreported indefinitelife identifiable intangibles valued at $65 million, meeting ASC Topic 805 requirements for capitalization. Impairment losses in 2023 for identifiable intangibles were $500,000. Goodwill from this acquisition was not impaired in 2023. San jose reported net income of $3 million in 2023, and paid no dividends. Playtel uses the complete equity method to report its investment in San Jose on its own books. Required a. Calculate the original amount of goodwill for this acquisition and its allocation to the controlling and noncontrolling interest (in thousands). b. Calculate equity in net income of San Jose, reported on Playtel's books in 2023, and noncontrolling interest in net income, reported on the consolidated income statement (in thousands). Use negative signs with answers that reduce net income amounts. c. Prepare eliminating entries (C), (E), (R), (O) and (N), required to consolidate Playtel's trial balance accounts with those of San Jose on December 31,2023 (in thousands)
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