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Stuart Corporation purchased 75% of the outstanding voting stock of Pete Corporation for $2,400,000 on January 1, 2014. On this date Pete's shareholders' equity consisted
Stuart Corporation purchased 75% of the outstanding voting stock of Pete Corporation for $2,400,000 on January 1, 2014. On this date Pete's shareholders' equity consisted of the following (in thousands): Common stock, $10 par $1,000 APIC 600 Retained Earnings 800 $2,400 Total SE The excess fair value of the net assets acquired was assigned 10% to undervalued inventory (sold in 2014), 40% to undervalued plant assets with a remaining useful life of eight years, and 50% to goodwill Comparative trial balances of Stuart Corporation and Pete Corporation at December 31, 2018, are as follows (in thousands): Stuart 3,765 Pete Other assets- net 2,600 Investment in Pete 2,340 3,185 Expenses (including cost of sales 600 Dividends 500 200 9,790 3,400 Common Stock, $10 par value 3,000 1,000 APIC 850 600 Retained earnings 1,670 800 Sales revenues 1,000 4,000 Income from Pete 270 9,790 3,400 Required: Determine the amounts that would appear in the consolidated financial statements of Stuart Corporation and Subsidiary for each of the following items: Goodwill at December 31, 2018. (2 points) 1. Income to Non-controlling interest for 2018. (3 points) Consolidated retained earnings at December 31, 2017. (2 points) 2. 3. Consolidated retained earnings at December 31, 2018. (2 points) 4. Controlling share of consolidated net income for 2018. (3 points) 5. Non-controlling interest at December 31, 2017. (3 points) 6
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