Question
ProForm acquired 60 percent of ClipRite on June 30, 2020, 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, 2020, 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 2021 financial statements are as follows:
ProForm | ClipRite | ||||||
Sales | $ | (1,020,000 | ) | $ | (1,040,000 | ) | |
Cost of goods sold | 645,000 | 510,000 | |||||
Operating expenses | 320,000 | 210,000 | |||||
Dividend income | (42,000 | ) | 0 | ||||
Net income | $ | (97,000 | ) | $ | (320,000 | ) | |
Retained earnings, 1/1/21 | $ | (3,600,000 | ) | $ | (1,070,000 | ) | |
Net income | (97,000 | ) | (320,000 | ) | |||
Dividends declared | 320,000 | 70,000 | |||||
Retained earnings, 12/31/21 | $ | (3,377,000 | ) | $ | (1,320,000 | ) | |
Cash and receivables | $ | 620,000 | $ | 520,000 | |||
Inventory | 510,000 | 920,000 | |||||
Investment in ClipRite | 1,200,000 | 0 | |||||
Fixed assets | 2,100,000 | 1,700,000 | |||||
Accumulated depreciation | (300,000 | ) | (650,000 | ) | |||
Totals | $ | 4,130,000 | $ | 2,490,000 | |||
Liabilities | $ | (553,000 | ) | $ | (970,000 | ) | |
Common stock | (200,000 | ) | (200,000 | ) | |||
Retained earnings, 12/31/21 | (3,377,000 | ) | (1,320,000 | ) | |||
Totals | $ | (4,130,000 | ) | $ | (2,490,000 | ) | |
(Note: Parentheses indicate a credit balance.)
ClipRite sold ProForm inventory costing $91,000 during the last six months of 2020 for $310,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $310,000 during 2021 for $470,000. At year-end, 10 percent is left.
Determine the consolidated balances for the following: (Input all amounts as positive values.)
Sales Cost of Goods Sold Operating Expenses Dividend Income Net Income Attributable to Noncontrolling Interest Inventory Noncontrolling Interest in Subsidiary, 12/31/21
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started