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On January 1 , 2 0 2 0 , Travers Company acquired 9 0 percent of Yarrow Company's outstanding stock for $ 7 2 0
On January Travers Company acquired percent of Yarrow Company's outstanding stock for $ The percent noncontrolling interest had an assessed falr value of $ on that date. Any acquisitiondate excess falr value over book value was attrlbuted to an unrecorded customer list developed by Yarrow with a remaining life of years.
On the same date, Yarrow acquired an percent interest in Stookey Company for $ At the acquisition date, the percent noncontrolling interest falr value was $ Any excess falr value was attributed to a fully amortized copyright that had a remalnng life of years. Although both Investments are accounted for using the Initial value method, nelther Yarrow nor Stookey has distributed dividends since the acquisition date. Travers has a policy to declare and pay cash dividends each year equal to percent of Its separate company operating earnings. Reported Income totals for follow:
tableTravers Company,$theta theta theta theta Yarrow Company,theta theta theta theta Stookey Company,theta theta theta theta
The following are the financlal statements for these three companies credit balances indicated by parentheses Stookey has transferred numerous amounts of Inventory to Yarrow since the takeover amounting to $ and $ These transactions include the same markup applicable to Stookey's outside sales. In each year, Yarrow carrled percent of this Inventory into the succeeding year before disposing of It An effective tax rate of percent Is applicable to all companies. All dividend declarations are pald in the same perlod.
tabletableOn January Travers Company acquired percent of Yarrow Company's outstanding stock for $ The percent noncontrolling interest had an assessed fair value of $ on that date. Any acquisitiondate excess fair value over book value was attributed to an unrecorded customer list developed by Yarrow with a remaining life of years.
On the same date, Yarrow acquired an percent interest in Stookey Company for $ At the acquisition date, the percent noncontrolling interest fair value was $ Any excess fair value was attributed to a fully amortized copyright that had a remaining life of years. Although both investments are accounted for using the initial value method, neither Yarrow nor Stookey has distributed dividends since the acquisition date. Travers has a policy to declare and pay cash dividends each year equal to percent of its separate company operating earnings. Reported income totals for follow:
Travers Company $
Yarrow Company
Stookey Company
The following are the financial statements for these three companies credit balances indicated by parentheses Stookey has transferred numerous amounts of inventory to Yarrow since the takeover amounting to $ and $ These transactions include the same markup applicable to Stookeys outside sales. In each year, Yarrow carried percent of this inventory into the succeeding year before disposing of it An effective tax rate of percent is applicable to all companies. All dividend declarations are paid in the same period.
Travers
Company Yarrow
Company Stookey
Company
Sales $ $ $
Cost of goods sold
Operating expenses
Net income $ $ $
Retained earnings, $ $ $
Net income above
Dividends declared
Retained earnings, $ $ $
Current assets $ $ $
Investment in Yarrow Company
Investment in Stookey Company
Land, buildings, and equipment net
Total assets $ $ $
Liabilities $ $ $
Common stock
Retained earnings,
Total liabilities and equities $ $ $
Prepare the business combination's consolidation worksheet; ignore income tax effects.
Determine the amount of income tax for Travers and Yarrow on a consolidated tax return for
Determine the amount of Stookey's income tax on a separate tax return for
Based on the answers to requirements b and c what journal entry does this combination make to record income tax?
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