LO 1, LOZ On January 1, 2019, Papa Company acquired 75% of Subordinate Company's voting stock for $88,600 in cash. The noncontrolling interest had an estimated fair value of $25,400. Subordinate's assets and liabilities at the date of acquisition were reported at amounts approximating fair value, but it had previously unreported indefinite life identifiable intangibles valued at $42,000. Subordinate's total shareholders' equity at January 1, 2019 was as follows: Capital stock Retained earnings Accumulated other comprehensive income Total $ 4,000 5,800 200 $ 10,000 It is now December 31, 2020 (two years later). Identifiable intangibles impairment for 2019 was $1,000 and there was no goodwill impairment. There is no identifiable intangibles impairment for 2020, but goodwill impairment for 2020 is $400. Papa uses the complete equity method to account for its investment. December 31, 2020 trial balances for Papa and Subordinate follow. Papa Dr (Cr) Subordinate Dr (Cr) Current assets 10,000 $ 1,000 Property, net 84,000 28,000 Intangibles Investment in Subordinate Calculate and enter the amount here Goodwill (107,774) (41,328) For 2020, calculate the equity in net income for the controlling and non-controlling interests Complete the consolidated worksheet using CERON elimination entries. Papa Subordinate Consol Dr (Cr) Dr Current assets Dr (Cr) $ 10,000 84,000 Dr (Cr) $ 2,000 56,000 Property, net Intangibles Investment in Subordinate Goodwill Liabilities Capital stock (107,774) (30,000) (40,000) (41,328) (4,000) (8,800) RE, beginning AOCI, beginning Noncontrolling interest Sales revenue (50,000) (28,000) LO 1, LOZ On January 1, 2019, Papa Company acquired 75% of Subordinate Company's voting stock for $88,600 in cash. The noncontrolling interest had an estimated fair value of $25,400. Subordinate's assets and liabilities at the date of acquisition were reported at amounts approximating fair value, but it had previously unreported indefinite life identifiable intangibles valued at $42,000. Subordinate's total shareholders' equity at January 1, 2019 was as follows: Capital stock Retained earnings Accumulated other comprehensive income Total $ 4,000 5,800 200 $ 10,000 It is now December 31, 2020 (two years later). Identifiable intangibles impairment for 2019 was $1,000 and there was no goodwill impairment. There is no identifiable intangibles impairment for 2020, but goodwill impairment for 2020 is $400. Papa uses the complete equity method to account for its investment. December 31, 2020 trial balances for Papa and Subordinate follow. Papa Dr (Cr) Subordinate Dr (Cr) Current assets 10,000 $ 1,000 Property, net 84,000 28,000 Intangibles Investment in Subordinate Calculate and enter the amount here Goodwill (107,774) (41,328) For 2020, calculate the equity in net income for the controlling and non-controlling interests Complete the consolidated worksheet using CERON elimination entries. Papa Subordinate Consol Dr (Cr) Dr Current assets Dr (Cr) $ 10,000 84,000 Dr (Cr) $ 2,000 56,000 Property, net Intangibles Investment in Subordinate Goodwill Liabilities Capital stock (107,774) (30,000) (40,000) (41,328) (4,000) (8,800) RE, beginning AOCI, beginning Noncontrolling interest Sales revenue (50,000) (28,000)
