Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Johannes Inc. acquired 8 0 percent of Corner Brook Ltd . common shares on January 1 , Year 4 , for $ 7 9 2

Johannes Inc. acquired 80 percent of Corner Brook Ltd. common shares on January 1, Year 4, for $792,000. At that date, the fair value of the non-controlling interest was $198,000. Corner Brooks balance sheet contained the following amounts at the time of the combination:
Cash $ 78,000 Accounts Payable $ 118,000
Accounts Receivable 152,000 Bonds Payable 598,000
Inventory 52,000 Common Shares ($10 par value)400,000
Construction Work in Progress 962,000 Retained Earnings 590,000
Other Assets (net)462,000
Total Assets $ 1,706,000 Total Liabilities & Equities $ 1,706,000
During each of the next three years, Corner Brook reported net income of $144,000 and paid dividends of $84,000. On January 1, Year 6, Johannes sold 9,000 of the Corner Brook shares for $284,000 in cash. Johannes used the equity method in accounting for its ownership of Corner Brook.
Required:
(a) Compute the balance in the investment account reported by Johannes on January 1, Year 6, before its sale of shares. (Omit $ sign in your response.)
Balance prior to sale of shares $
(b) Prepare the entry recorded by Johannes when it sold the Corner Brook shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
(c) Calculate consolidated net income attributable to the noncontrolling interest for Year 6 and noncontrolling interest at the end of Year 6.(Omit $ sign in your response.)
Consolidated net income attributable to NCI $
Non-controlling interest $
PrevQuestion 1 of 11 Total1 of 11Visit question mapNext McGraw Hill

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting

Authors: John Burns, Martin Quinn, Liz Warren, João Oliveira

1st Edition

0077121619, 978-0077121617

More Books

Students also viewed these Accounting questions

Question

Where do you see yourself in 5/10 years?

Answered: 1 week ago