Question
ProForm acquired 80 percent of ClipRite on June 30, 2020, for $1,280,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $560,000
ProForm acquired 80 percent of ClipRite on June 30, 2020, for $1,280,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $560,000 was recognized and is being amortized at the rate of $14,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $320,000 at the acquisition date. The 2021 financial statements are as follows:
ProForm | ClipRite | ||||||
Sales | $ | (980,000 | ) | $ | (960,000 | ) | |
Cost of goods sold | 625,000 | 490,000 | |||||
Operating expenses | 280,000 | 190,000 | |||||
Dividend income | (80,000 | ) | 0 | ||||
Net income | $ | (155,000 | ) | $ | (280,000 | ) | |
Retained earnings, 1/1/21 | $ | (2,500,000 | ) | $ | (1,030,000 | ) | |
Net income | (155,000 | ) | (280,000 | ) | |||
Dividends declared | 280,000 | 100,000 | |||||
Retained earnings, 12/31/21 | $ | (2,375,000 | ) | $ | (1,210,000 | ) | |
Cash and receivables | $ | 580,000 | $ | 480,000 | |||
Inventory | 470,000 | 880,000 | |||||
Investment in ClipRite | 1,280,000 | 0 | |||||
Fixed assets | 1,500,000 | 1,500,000 | |||||
Accumulated depreciation | (400,000 | ) | (450,000 | ) | |||
Totals | $ | 3,430,000 | $ | 2,410,000 | |||
Liabilities | $ | (555,000 | ) | $ | (700,000 | ) | |
Common stock | (500,000 | ) | (500,000 | ) | |||
Retained earnings, 12/31/21 | (2,375,000 | ) | (1,210,000 | ) | |||
Totals | $ | (3,430,000 | ) | $ | (2,410,000 | ) | |
(Note: Parentheses indicate a credit balance.)
ProForm sold ClipRite inventory costing $87,000 during the last six months of 2020 for $270,000. At year-end, 30 percent remained. ProForm sold ClipRite inventory costing $290,000 during 2021 for $430,000. 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
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