On January 1, 2019, Aspen Company acquired 80 percent of Birch Company's voting stock for $438,000. Birch reported a $457,500 book value, and the fair value of the noncontrolling interest was $109,500 on that date. Then, on January 1, 2020, Birch acquired 80 percent of Cedar Company for $200,000 when Cedar had a $205,000 book value and the 20 percent noncontrolling interest was valued at $50,000 In each acqulsition, 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 financial Information. Investment Income figures are not included. 2019 2020 2021 Sales n company $632,500 $749,500 $ 822,500 Birch Company 261.250 327,250 416,900 Cedar Company Not available 185,900 292,600 Expenses Aspen Company $ 542,500 $ 522,500 $750,000 Birch Company 200,000 261,000 935,000 Cedar Company Not available 171.000 250,000 Dividends declared Aspen Company $ 15,000 45,000 $ 55,000 Dirch Company 8,000 15,000 15,000 Cedar Company Not available 2.000 6.000 Assume that each of the following questions is independent a. If all companies use the equity method for Internal reporting purposes, what is the December 31, 2020, balance in Asper's Investment in Birch Company account? b. What is the consolidated not income for this business combination for 20217 c. What is the net income attributable to the noncontrolling interest in 20217 d. Assume that Birch made intra entity inventory transfers to Aspen that have resulted the following intra-entity gross profits in Date Amount 12/31/19 $16,600 12/31/20 23,600 12/31/21 33,200 What is the accrual-based net income of Birch in 2020 and 2021, respectively? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg A to C Reg D a. 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? Show less IS b. Investment in Brch at December 31, 2020 Corolldated not income Noncontrolling interesti' share of the consolidated net income Amount 564,220 132,400 25,740 $ 12/31/19 $16,600 12/31/20 23,600 12/31/21 33,200 What is the accrual-based net income of Birch in 2020 and 2021, respectively? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg A to C Reg D Assume that Birch made intra-entity Inventory transfers to Aspen that have resulted in the following intra-entity gross profits In inventory at the end of each year: Date Punount 12/31/19 12/31/20 12/31/21 $16,600 23,600 33,200 What is the accrual-based net income of Birch in 2020 and 2021, respectively? Show less Accrual-based net income 2020 27,660 2021 33.700
