Question
ProForm acquired 60 percent of ClipRite on June 30, 2017, for $1,020,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $400,000
ProForm acquired 60 percent of ClipRite on June 30, 2017, for $1,020,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $400,000 was recognized and is being amortized at the rate of $15,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $680,000 at the acquisition date. The 2018 financial statements are as follows:
ProForm | ClipRite | ||||||
Sales | $ | (990,000) | $ | (980,000) | |||
Cost of goods sold | 630,000 | 495,000 | |||||
Operating expenses | 290,000 | 195,000 | |||||
Dividend income | (24,000) | 0 | |||||
Net income | $ | (94,000) | $ | (290,000) | |||
Retained earnings, 1/1/18 | $ | (2,400,000) | $ | (1,040,000) | |||
Net income | (94,000) | (290,000) | |||||
Dividends declared | 290,000 | 40,000 | |||||
Retained earnings, 12/31/18 | $ | (2,204,000) | $ | (1,290,000) | |||
Cash and receivables | $ | 590,000 | $ | 490,000 | |||
Inventory | 480,000 | 890,000 | |||||
Investment in ClipRite | 1,020,000 | 0 | |||||
Fixed assets | 1,800,000 | 1,550,000 | |||||
Accumulated depreciation | (500,000) | (500,000) | |||||
Totals | $ | 3,390,000 | $ | 2,430,000 | |||
Liabilities | $ | (586,000) | $ | (540,000) | |||
Common stock | (600,000) | (600,000) | |||||
Retained earnings, 12/31/18 | (2,204,000) | (1,290,000) | |||||
Totals | $ | (3,390,000) | $ | (2,430,000) | |||
ProForm sold ClipRite inventory costing $88,000 during the last six months of 2017 for $280,000. At year-end, 30 percent remained. ProForm sells ClipRite inventory costing $295,000 during 2018 for $440,000. At year-end, 10 percent is left.
Determine the consolidated balances for the following accounts:
Consolidated Balance $ 1,530,000 $ 641,900 $ 500,000 Sales Cost of goods sold Operating expenses Dividend income Net income attributable to noncontrolling interest Inventory Noncontrolling interest in subsidiary, 12/31/18 0
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