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please solve asap Palace Company acquired 60% of Sage Company for $573,000 on January 1,2022. Sage reported a book value of stockholder's equity of $800,000
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Palace Company acquired 60% of Sage Company for $573,000 on January 1,2022. Sage reported a book value of stockholder's equity of $800,000 (including common stock of $460,000 and retained earnings of $340,000 ) on that date. Fair value of the 40% noncontrolling interest on the acquisition date was $350,000. On the acquisition date, a machine was undervalued by $45,000 (5-year remaining life) and a copyright was overvalued by $24,000 (8-year remaining life). Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. In 2022, Sage earned net income of $270,000 and paid dividends of $30,000. Requirements: a. Calculate the goodwill that is assigned to controlling (Cl) and noncontrolling interest (NCl). Answer: To Cl: : To NCl: b. Calculate the investment related income that the parent company would report for 2022 using each of the three methods (1) equity method; (2) initial value method; (3) partial equity method. Answer: (1): (2): (3) c. How much net income of Sage was attributable to the noncontrolling interest in 2022 under the equity method Step by Step Solution
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