Question
On January 1, 2021, Ackerman Company acquires 80% of Seidel Company for $1,831,840 in cash consideration. The remaining 20 percent noncontrolling interest shares had an
On January 1, 2021, Ackerman Company acquires 80% of Seidel Company for $1,831,840 in cash consideration. The remaining 20 percent noncontrolling interest shares had an acquisition-date estimated fair value of $457,960. Seidels acquisition-date total book value was $1,819,000.
The fair value of Seidels recorded assets and liabilities equaled their carrying amounts. However, Seidel had two unrecorded assetsa trademark with an indefinite life and estimated fair value of $262,150 and several customer relationships estimated to be worth $192,600 with four-year remaining lives. Any remaining acquisition-date fair value in the Seidel acquisition was considered goodwill.
During 2021, Seidel reported $184,040 net income and declared and paid dividends totaling $53,500. Also in 2021, Ackerman reported $374,500 net income, but neither declared nor paid dividends.
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What amount should Ackerman assign to the 20 percent noncontrolling interest of Seidel at the acquisition date?
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How much of 2021 consolidated net income should be allocated to the noncontrolling interest?
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What amount of 2021 dividends should be allocated to the noncontrolling interest?
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What amount of noncontrolling interest should appear in the owners equity section of Ackermans consolidated balance sheet at December 31, 2021?
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