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8/30/2015 Unit #5 Lab (Graded) Christopher WeeksBarnitt copy of AC450 FALL 2014 SETUP COURSE: copy of AC450 2014 SETUP COURSE Unit #5 Lab (Graded) 3. instructions | help value: 10.00 points Problem 5-22 (LO 5-7) On January 1, 2014, 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, NetSpeed had common stock of $800,000 and Retained Earnings of $40,000. The acquisitiondate 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 5year remaining life. During the next two years, NetSpeed reported the following: 2014 2015 Income $ 80,000 115,000 Dividends $ 8,000 8,000 On July 1, 2014, 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 intraentity transfer. a. Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2015. Investment in NetSpeed, Inc., 12/31/15 b. Prepare the worksheet adjustments for the December 31, 2015, consolidation of QuickPort and NetSpeed. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Transaction Consolidating Entries Debit Credit (1) Prepare entry *TA 1 (2) Prepare entry S 2 (3) Prepare entry A 3 http://ezto.mheducation.com/hm.tpx 1/3 8/30/2015 Unit #5 Lab (Graded) (4) Prepare entry I 4 (5) Prepare entry D 5 (6) Prepare entry E 6 (7) Prepare entry ED 7 References eBook & Resources Problem Difficulty: Medium Problem 522 (LO 5 7) Learning Objective: 0507 Prepare the consolidation entries to remove the effects of upstream and downstream intraentity fixed asset transfers across affiliated entities. http://ezto.mheducation.com/hm.tpx 2/3