Question
On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $47,604. Calvin Co. has one recorded asset, a specialized production
On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $47,604. Calvin Co. has one recorded asset, a specialized production machine with a book value of $13,500 and no liabilities. The fair value of the machine is $65,500, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvins total acquisition date fair value is $79,340. |
At the end of the year, Calvin reports the following in its financial statements: |
Revenues | $ | 64,950 | Machine | $ | 12,150 | Common stock | $ | 13,500 |
Expenses | 29,100 | Other assets | 32,200 | Retained earnings | 30,850 | |||
Net income | $ | 35,850 | Total assets | $ | 44,350 | Total equity | $ | 44,350 |
Dividends paid | $ | 5,000 | ||||||
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Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvins machine (net of accumulated depreciation), and the process trade secret.
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