Question
ProForm acquired 70 percent of ClipRite on June 30, 2017, for $1,470,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $600,000
ProForm acquired 70 percent of ClipRite on June 30, 2017, for $1,470,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $600,000 was recognized and is being amortized at the rate of $19,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $630,000 at the acquisition date. The 2018 financial statements are as follows:
ProForm | ClipRite | ||||||
Sales | $ | (1,030,000 | ) | $ | (1,060,000 | ) | |
Cost of goods sold | 650,000 | 515,000 | |||||
Operating expenses | 330,000 | 215,000 | |||||
Dividend income | (56,000 | ) | 0 | ||||
Net income | $ | (106,000 | ) | $ | (330,000 | ) | |
Retained earnings, 1/1/18 | $ | (3,800,000 | ) | $ | (1,080,000 | ) | |
Net income | (106,000 | ) | (330,000 | ) | |||
Dividends declared | 330,000 | 80,000 | |||||
Retained earnings, 12/31/18 | $ | (3,576,000 | ) | $ | (1,330,000 | ) | |
Cash and receivables | $ | 630,000 | $ | 530,000 | |||
Inventory | 520,000 | 930,000 | |||||
Investment in ClipRite | 1,470,000 | 0 | |||||
Fixed assets | 2,200,000 | 1,750,000 | |||||
Accumulated depreciation | (400,000 | ) | (700,000 | ) | |||
Totals | $ | 4,420,000 | $ | 2,510,000 | |||
Liabilities | $ | (544,000 | ) | $ | (880,000 | ) | |
Common stock | (300,000 | ) | (300,000 | ) | |||
Retained earnings, 12/31/18 | (3,576,000 | ) | (1,330,000 | ) | |||
Totals | $ | (4,420,000 | ) | $ | (2,510,000 | ) | |
ClipRite sold ProForm inventory costing $92,000 during the last six months of 2017 for $320,000. At year-end, 30 percent remained. ClipRite sells ProForm inventory costing $315,000 during 2018 for $480,000. At year-end, 10 percent is left. With these facts, determine the consolidated balances for the following:
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