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On January 1, 2019, Aspen Company acquired 80 percent of Birch Company's voting stock for $482,000. Birch reported a $542,500 book value, and the fair

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On January 1, 2019, Aspen Company acquired 80 percent of Birch Company's voting stock for $482,000. Birch reported a $542,500 book value, and the fair value of the noncontrolling interest was $120,500 on that date. Then. on January 1. 2020, Birch acquired 80 percent of Cedar Company for $144,000 when Cedar had a $150,000 book value and the 20 percent noncontrolling interest was valued at $36,000. In each acquisition, the subsidiary's excess acquisition-date fair over book value was assigned to a trade name with a 30-year remaining life. These companies report the following nancial information. investment income gures are not included. 2019 2020 2021 Sales: Aspen Company 3 595, 000 $ 767,500 3 907,500 Birch Company 235,250 290,250 551,300 Cedar Company Not. available 172, 500 276,200 Expenses : Aspen Company 3- 475, 000 $ 452,500 $ 547,500 Eiroh Company 230,000 230,000 402,500 Cedar Company Not. available 157, 000 228, 000 Dividends declared: Aspen Company $ 20,000 $ 30,000 $ 40,000 Birch Company 15,000 18,000 18,000 Cedar Company Not. available 4, 000 12, 000 Assume that each of the following questions is independent: 3. If all companies use the equity method for internal reporting purposes, what is the December 31, 2020, balance in Aspen's Investment in Birch Company account? b. What is the consolidated net income for this business combination for 2021? c. What is the net income attributable to the noncontrolling interest in 2021? :1. Assume that Birch made intra-entity inventory transfers to Aspen that have resulted in the following intra-entity gross prots in inventory at the end of each year: Assume that each ofthe following questions is independent: 3. If all companies use the equity method for internal reporting purposes. what is the December 31, 2020. balance in Aspen's Investment in Birch Company account? b. What is the consolidated net income for this business combination for 2021? c. What is the net income attributable to the noncontrolling interest in 2021? d. Assume that Birch made intra-entity inventory transfers to Aspen that have resulted in the following intra-entity gross prots in inventory at the end of each year: Data Amunt'. 12(313'19 $16,000 121'31120 23,200 12/31121 25,600 ' What is the accrual-based net income of Birch in 2020 and 2021. respectively

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