ProForm acquired 70 percent of ClipRite on June 30, 2020, for $1,470,000 in cash. Based on...

Transcribed Image Text:

ProForm acquired 70 percent of ClipRite on June 30, 2020, 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 2021 financial statements are as follows: Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/21 Totals (Note: Parentheses indicate a credit balance.) ProForm $(1,030,000) 650,000 330,000 (56,000) $ (106,000) $(3,800,000) (106,000) 330,000 $(3,576,000) $ 630,000 520,000 1,470,000 2,200,000 (400,000) $ 4,420,000 $ (544,000) (300,000) (3,576,000) $(4,420,000) ClipRite $ (1,060,000) 515,000 215,000 0 $ (330,000) $ (1,080,000) (330,000) 80,000 $ (1,330,000) $ 530,000 930,000 0 1,750,000 (700,000) $ 2,510,000 $ (880,000) (300,000) (1,330,000) $(2,510,000) ClipRite sold ProForm inventory costing $92,000 during the last six months of 2020 for $320,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $315,000 during 2021 for $480,000. 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 Answer is complete but not entirely correct. Consolidated Balance Sales $ 1,610,000 Cost of goods sold $ 633,100 Operating expenses $ 564,000 Dividend income $ 0 Net income attributable to noncontrolling interest Inventory $ 93,300 $ 1,433,500 Noncontrolling interest in subsidiary, 12/31/21 $ 649,000 ProForm acquired 70 percent of ClipRite on June 30, 2020, 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 2021 financial statements are as follows: Sales Cost of goods sold Operating expenses Dividend income Net income Retained earnings, 1/1/21 Net income Dividends declared Retained earnings, 12/31/21 Cash and receivables Inventory Investment in ClipRite Fixed assets Accumulated depreciation Totals Liabilities Common stock Retained earnings, 12/31/21 Totals (Note: Parentheses indicate a credit balance.) ProForm $(1,030,000) 650,000 330,000 (56,000) $ (106,000) $(3,800,000) (106,000) 330,000 $(3,576,000) $ 630,000 520,000 1,470,000 2,200,000 (400,000) $ 4,420,000 $ (544,000) (300,000) (3,576,000) $(4,420,000) ClipRite $ (1,060,000) 515,000 215,000 0 $ (330,000) $ (1,080,000) (330,000) 80,000 $ (1,330,000) $ 530,000 930,000 0 1,750,000 (700,000) $ 2,510,000 $ (880,000) (300,000) (1,330,000) $(2,510,000) ClipRite sold ProForm inventory costing $92,000 during the last six months of 2020 for $320,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $315,000 during 2021 for $480,000. 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 Answer is complete but not entirely correct. Consolidated Balance Sales $ 1,610,000 Cost of goods sold $ 633,100 Operating expenses $ 564,000 Dividend income $ 0 Net income attributable to noncontrolling interest Inventory $ 93,300 $ 1,433,500 Noncontrolling interest in subsidiary, 12/31/21 $ 649,000

Answer rating: 100% (QA)

To accurately determine the consolidated balances we need to consider how intercompany transactions affect each account Well include these adjustments ... View the full answer