Question
West Company acquired 60 percent of Solar Company for $315,000 when Solars book value was $415,000. The newly comprised 40 percent noncontrolling interest had an
West Company acquired 60 percent of Solar Company for $315,000 when Solars book value was $415,000. The newly comprised 40 percent noncontrolling interest had an assessed fair value of $210,000. Also at the acquisition date, Solar had a trademark (with a 10-year life) that was undervalued in the financial records by $70,000. Also, patented technology (with a 5-year life) was undervalued by $50,000. Two years later, the following figures are reported by these two companies (stockholders equity accounts have been omitted):
West Company Book Value | Solar Company Book Value | Solar Company Fair Value | |||||||||
Current assets | $ | 630,000 | $ | 310,000 | $ | 330,000 | |||||
Trademarks | 270,000 | 210,000 | 290,000 | ||||||||
Patented technology | 420,000 | 160,000 | 160,000 | ||||||||
Liabilities | (400,000 | ) | (130,000 | ) | (130,000 | ) | |||||
Revenues | (910,000 | ) | (410,000 | ) | |||||||
Expenses | 490,000 | 310,000 | |||||||||
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