On January 1, 2017, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $927,000 in cash and stock options. At the acquisition date, NetSpeed had common stock of $970,000 and Retained Earnings of $48,500. The acquisition-date fair value of the 10 percent noncontrolling interest was $103,000. QuickPort attributed the $11,500 excess of NetSpeed's fair value over book value to a database with a five-year remaining life.

During the next two years, NetSpeed reported the following:

Problem 5-22 (LO 5-7) On January 1, 2017, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $927,000 in cash and stock options. At the acquisition date, NetSpeed had common stock of $970,000 and Retained Earnings of $48,500. The acquisition-date fair value of the 10 percent noncontrolling interest was $103,000. QuickPort attributed the $11,500 excess of NetSpeed's fair value over book value to a database with a five-year remaining life. During the next two years, NetSpeed reported the following: Dividends Net Income Declared $ 1,500 1,500 2017 15,300 22,000 2018 On July 1, 2017, QuickPort sold communication equipment to NetSpeed for $13,300. The equipment originally cost $15,000 and had accumulated depreciation of $5,000 and an estimated remaining life of three years at the date of the intra-entity transfer. Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2018. b. Prepare the worksheet adjustments for the December 31, 2018, consolidation of QuickPort and NetSpeed. a. Required A Required B Prepare the worksheet adjustments for the December 31, 2018, consolidation of QuickPort and NetSpeed. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Transaction Accounts Debit Credit Equipment 1,700 1 1 Investment in NetSpeed 3,650 Accumulated depreciation 4,500 Common stock - NetSpeed 2 2 970,000 Retained earnings-NetSpeed 62,300 Investment in NetSpeed 929,070 Noncontrolling interest 103,230 3 3 Database 9,200 Investment in NetSpeed 8,280 Noncontrolling interest 920 4 4 Equity in earnings of NetSpeed 17,730 Investment in NetSpeed 18,630 5 Investment in NetSpeed 5 1,350 1,350 Dividends declared Amartization expense 6 6 2,300 Database 2,300 Accumulated depreciation 7 7 2,700 Depreciation expense 2,700