On January 1, 2021, Gooch Company acquires 80% of the outstanding common stock of House Inc., for a purchase price of $12,400,000. It was determined that the fair value of the noncontrolling interest in the subsidiary is $3,100,000. The book value of the Houses stockholders equity on the date of acquisition is $10,000,000 and its fair value of identifiable net assets is $10,850,000. The acquisition-date acquisition accounting premium (AAP) is allocated $600,000 to equipment with a remaining useful life of 10 years, and $250,000 to a patent with a remaining useful life of 5 years. Assume that during the year ended December 31, 2021, House reports net income of $950,000 and pays dividends of $150,000. Gooch uses the equity method to account for its investment in House. Determine the December 31, 2021 ending balance in Gooch Companys pre-consolidation equity investment account.

Select one: A. $12,400,000 B. $12,952,000 C. $13,090,000 D. $13,040,000

On January 1, 2021, Gooch Company acquires 80% of the outstanding common stock of House Inc., for a purchase price of $12,400,000. It was determined that the fair value of the noncontrolling interest in the subsidiary is $3,100,000. The book value of the Houses stockholders equity on the date of acquisition is $10,000,000 and its fair value of identifiable net assets is $10,850,000. The acquisition-date acquisition accounting premium (AAP) is allocated $600,000 to equipment with a remaining useful life of 10 years, and $250,000 to a patent with a remaining useful life of 5 years.

The [A] consolidating journal entry (on Gooch's books) to recognize the acquisition date AAP and allocate the ownership interest in those assets to the parent and noncontrolling interests includes: Select one: A. Noncontrolling interest, credit, $1,100,000 B. House's retained earnings, debit, $2,000,000 C. Equity investment, credit, $5,350,000 D. Noncontrolling interest, credit, $3,100,000

On January 1, 2021, Gooch Company acquires 80% of the outstanding common stock of House Inc., for a purchase price of $12,400,000. It was determined that the fair value of the noncontrolling interest in the subsidiary is $3,100,000. The book value of the Houses stockholders equity on the date of acquisition is $10,000,000 and its fair value of identifiable net assets is $10,850,000. The acquisition-date acquisition accounting premium (AAP) is allocated $600,000 to equipment with a remaining useful life of 10 years, and $250,000 to a patent with a remaining useful life of 5 years. Determine the total goodwill to be recognized at acquisition date. Select one: A. $23,400,000 B. $ 4,400,000 C. $-0- D. $ 4,650,000

Shannon Company had common stock of $160,000 and retained earnings of $234,000. Gus, Inc. had common stock of $350,000 and retained earnings of $376,000. On January 1, 2021, Gus issued 35,000 shares of common stock with a $1 par value and a $15 fair value for all of Shannon Company's outstanding common stock. Immediately after the combination, what were the consolidated net assets? Select one: A. $ 919,000 B. $1,155,000 C. $ 884,000 D. $1,251,000

On April 1, 2020, Republic Company sold equipment to its wholly owned subsidiary, Barre Corporation, for $40,000. At the time of the transfer, the asset had an original cost (to Republic) of $60,000 and accumulated depreciation of $25,000. The equipment has a five year estimated remaining life. Barre reported net income of $250,000, $270,000 and $310,000 in 2020, 2021, and 2022, respectively. Republic received dividends from Barre of $90,000, $105,000 and $120,000 for 2020, 2021, and 2022, respectively. What was the amount of the credit to depreciation expense on the 2021 consolidation worksheet? Select one: A. $1,000 B. $1,600 C. $-0- D. $750

On January 1, 2021, Eisman Company purchased 100% of the common stock Kandler Enterprises for $600,000. This transaction is a nontaxable acquisition under the Internal Revenue Code. On the date of acquisition, Kandler had common stock of $200,000 and retained earnings of $280,000. The fair values of Kandlers net assets equal their respective book values except for equipment that is undervalued by $30,000 and an unrecorded brand name valued at $45,000. Assume that the tax bases of Kandlers pre-acquisition identifiable net assets equal their book values. Eismans tax effective tax rate is 30%. What is the amount of goodwill recorded in connection with this combination? Select one: A. $45,000 B. $22,500 C. $-0- D. $67,500

Spring Creek, Inc. purchased a 18% interest in Floyd Corporation on January 2, 2020. The purchase price was $200,000. Spring Creek's officers constitute a majority of Floyd Corporations board of directors. The investee reported net income of $300,000 and paid dividends of $50,000 in 2020. On December 31, 2020, balance sheet, what amount should Spring Creek, Inc. report as Equity Investment in Floyd Corporation? Select one: A. $254,000 B. $300,000 C. $245,000 D. $263,000