Problem 8 -8 (page 490): Fill in the following a) Calculate the investment account balance and non-controlling interest balance as of December 31, year 4: Jenson's shareholders' equity Unamortized AD Total value of subsidiary for consolidated purposes Hein's percentage ownership Balance of investment in Jensen under equity method NCI on consolidated balance sheet b) Prepare journal entries related to the Hein investment during year 5. b) Prepare journal entries related to the Hein investment during year 5. c) Calculate the investment account and NCI balances as of December 31, year 5 Jenson's shareholders' equity Unamortized AD Total value of subsidiary for consolidated purposes Hein's percentage ownership Balance of investment in Jensen under equity method NCI on consolidated balance sheet d) Calculate trademarks on the consolidated balance sheet Dec. 31, year 5 Trademarks, December 31, year 4 Amortized during year 5 1 Page Trademarks, December 31, year 5 e) Prepare the journal entry to record the sale of 30,000 ordinary shares on January 1, year 6. Problem 8-8 LO3 At December 31, Year 4. Hein Company owned 90,000 ordinary shares of Jensen Company when the shareholders equity of Jensen was as follows: Ordinary shares (100,000 no par value shares issued and outstanding) $ 800,000 Retained earnings 1.000.000 $1,800,000 The undepleted acquisition differential at December 31, Year 4, was as follows: Trademarks-net (remaining useful life of 9 years) $180,000 Goodwill 240,000 $420,000 On January 1, Year 5, Hein sold 20,000 ordinary shares of Jensen to an unrelated party for $500,000. Jensen's statement of retained earnings for Year 5 was as follows: Retained earnings, beginning of year $1,000,000 Profit 210,000 Dividends (100.000) Retained earnings, end of year $1,110,000 On January 1, Year 6. Hein sold 30,000 ordinary shares of Jensen to an unrelated party for their fair value of $26 per share. Additional Information Hein Company uses the equity method to account for its investment in Jensen for its separate entity financial statements. Neither Hein or Jensen report any trademarks on their separate entity financial statements. The undepleted acquisition differential at December 31, Year 4. was split between the controlling and non-con- trolling interests in direct proportion to their respective percentage ownership. There was no impairment of goodwill in Year 5. There were no unrealized profits from intercompany transactions since the date of acquisition. . Required (a) Calculate the balance in the investment account at December 31, Year 4, and non-controlling interest on the consolidated balance sheet at December 31, Year 4. (b) Prepare the journal entries relating to Hein investment in Jensen for Year 5. (c) Calculate the balance in the investment account at December 31, Year 5, and non-controlling interest on the consolidated balance sheet at December 31, Year 5. (d) Calculate trademarks on the consolidated balance sheet at December 31, Year 5. (e) Prepare the journal entry to record the sale of 30,000 ordinary shares by Hein on January 1, Year 6
