Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ProForm acquired 60 percent of ClipRite on June 30, 2020, for $840,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $480,000

ProForm acquired 60 percent of ClipRite on June 30, 2020, for $840,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $480,000 was recognized and is being amortized at the rate of $12,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $560,000 at the acquisition date. The 2021 financial statements are as follows:

ProForm ClipRite
Sales $ (960,000 ) $ (920,000 )
Cost of goods sold 615,000 480,000
Operating expenses 260,000 180,000
Dividend income (48,000 ) 0
Net income $ (133,000 ) $ (260,000 )
Retained earnings, 1/1/21 $ (2,000,000 ) $ (1,010,000 )
Net income (133,000 ) (260,000 )
Dividends declared 260,000 80,000
Retained earnings, 12/31/21 $ (1,873,000 ) $ (1,190,000 )
Cash and receivables $ 560,000 $ 460,000
Inventory 450,000 860,000
Investment in ClipRite 840,000 0
Fixed assets 1,300,000 1,400,000
Accumulated depreciation (200,000 ) (350,000 )
Totals $ 2,950,000 $ 2,370,000
Liabilities $ (777,000 ) $ (880,000 )
Common stock (300,000 ) (300,000 )
Retained earnings, 12/31/21 (1,873,000 ) (1,190,000 )
Totals $ (2,950,000 ) $ (2,370,000 )

(Note: Parentheses indicate a credit balance.)

ProForm sold ClipRite inventory costing $85,000 during the last six months of 2020 for $250,000. At year-end, 30 percent remained. ProForm sold ClipRite inventory costing $280,000 during 2021 for $410,000. At year-end, 10 percent is left.

Determine the consolidated balances for the following accounts: (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

Consolidated BalanceSalesCost of goods soldOperating expensesDividend incomeNet income attributable to noncontrolling interestInventoryNoncontrolling interest in subsidiary, 12/31/21

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

Contemporary Auditing Real Issues And Cases

Authors: Michael C. Knapp, Loreen Knapp

4th Edition

0324048610, 9780324048612

More Books

Students also viewed these Accounting questions

Question

=+(2,5], P1) such that Fc F, and P, agrees with P on $ .

Answered: 1 week ago