Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ProForm acquired 60 percent of ClipRite on June 30, 2017, for $1,200,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $550,000

ProForm acquired 60 percent of ClipRite on June 30, 2017, for $1,200,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $550,000 was recognized and is being amortized at the rate of $18,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $800,000 at the acquisition date. The 2018 financial statements are as follows:

image text in transcribed

ProForm sold ClipRite inventory costing $91,000 during the last six months of 2017 for $310,000. At year-end, 30 percent remained. ProForm sells ClipRite inventory costing $310,000 during 2018 for $470,000. At year-end, 10 percent is left.

Determine the consolidated balances for the following accounts:

image text in transcribed

ProForm ClipRite $ (1,020,000 (1,040,000) Sales Cost of goods sold Operating expenses Dividend income 510,000 210,000 645,000 320,000 (42,000 $(97,000) (320,000) Net income tained earnings, 1/1/18 Net income Dividends declared Re $(3,600,000 (1,070,000) 320,000) (97,000) 320,00010 70,000 (3,377,000) (1,320,000) $ 520,000 920,000 Retained earnings, 12/31/18 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation $ 620,000 510,000 1,200,000 2,100,000 1,700,000 300,000 650,000) 4,130,000 $2,490,000 Totals Liabilities Common stock Re $ (553,000 (970,000) (200,000) (200,000) 3,377,000) tained earnings, 12/31/18 Totals $(4,130,000) (2,490,000)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Finance

Authors: Eddie McLaney

11th Edition

1292134402, 9781292134406

More Books

Students also viewed these Finance questions