Equity in Net Income and Noncontrolling Interest in Net Income

At the beginning of the current year, Packwild Tours Inc. acquired 60 percent of Snowbird Resorts common stock for $27 million in cash and stock. The estimated fair value of the noncontrolling interest was $12 million. At the date of acquisition, Snowbirds equity accounts consisted of capital stock of $11 million and a retained earnings deficit of $2 million. Snowbird reports its identifiable net assets at amounts approximating fair value, with these exceptions: land is undervalued by $0.6 million, property ( 20 -year remaining life) is overvalued by $3.0 million, and previously unreported technology with an indefinite life was valued at $6.0 million. For the year following acquisition, Snowbird reports net income of $48,000. Impairment testing reveals $120,000 in impairment on the technology but no impairment of other assets. Packwild reports its investment in Snowbird on its own books using the complete equity method.

Note: Enter all zeros with your numerical answers, do not abbreviate your answers in thousands or in millions.

a. Calculate the amount of goodwill originally reported for this acquisition.

$Answer

b. Calculate equity in net income for the current year, reported on Packwilds books, and the noncontrolling interest in Snowbirds income, reported on the consolidated income statement.

Note: Use negative signs with answers that reduce net income amounts.

	Total	Equity in NI	Noncontrolling
			Interest in NI
Snowbirds reported net income
Revaluation write-offs:
Property
Technology