Question
West Company acquired 60 percent of Solar Company for $306,000 when Solars book value was $406,000. The newly comprised 40 percent noncontrolling interest had an
West Company acquired 60 percent of Solar Company for $306,000 when Solars book value was $406,000. The newly comprised 40 percent noncontrolling interest had an assessed fair value of $204,000. Also at the acquisition date, Solar had a trademark (with a 10-year life) that was undervalued in the financial records by $62,000. Also, patented technology (with a 5-year life) was undervalued by $42,000. Two years later, the following figures are reported by these two companies (stockholders equity accounts have been omitted):
Fair Value | |||||||||||
Current assets | $ | 622,000 | $ | 302,000 | $ | 322,000 | |||||
Trademarks | 262,000 | 202,000 | 282,000 | ||||||||
Patented technology | 412,000 | 152,000 | 152,000 | ||||||||
Liabilities | (392,000 | ) | (122,000 | ) | (122,000 | ) | |||||
Revenues | (902,000 | ) | (402,000 | ) | |||||||
Expenses | 498,000 | 302,000 | |||||||||
Investment income | Not given | ||||||||||
What is the consolidated trademarks balance?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started