Question
Stuart Corporation purchased 75% of the outstanding voting stock of Pete Corporation for $2,400,000 on January 1, 2014. On this date Petes 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 Petes shareholders equity consisted of the following (in thousands):
Common stock, $10 par $1,000
APIC 600
Retained Earnings 800
Total SE $2,400
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 | Pete | |
Other assets net | 3,765 | 2,600 |
Investment in Pete | 2,340 | - |
Expenses (including cost of sales) | 3,185 | 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 | 4,000 | 1,000 |
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.
- Income to Non-controlling interest for 2018.
- Consolidated retained earnings at December 31, 2017
- Consolidated retained earnings at December 31, 2018.
- Controlling share of consolidated net income for 2018.
- Non-controlling interest at December 31, 2017
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