On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $313,500 when K-Tech’s...

On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $313,500 when K-Tech’s book value was $413,500. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $209,000. At the acquisition date, K-Tech's trademark (20-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (10-year remaining life) was undervalued by $29,000.

In 2020, K-Tech reports $25,500 net income and declares no dividends. At the end of 2021, the two companies report the following figures (stockholders’ equity accounts have been omitted):

	French Company Carrying Amounts			K-Tech Company Carrying Amounts			K-Tech Company Fair Values
Current assets	$	629,000		$	309,000		$	329,000
Trademarks		269,000			209,000			289,000
Patented technology		419,000			159,000			188,000
Liabilities		(399,000	)		(129,000	)		(129,000	)
Revenues		(909,000	)		(409,000	)
Expenses		491,000			309,000
Investment income		Not given

What is the 2021 consolidated net income before allocation to the controlling and noncontrolling interests?

In 2021, assuming K-Tech has declared no dividends, what are the noncontrolling interest’s share of the subsidiary’s income and the ending balance of the noncontrolling interest in the subsidiary?

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ekkarill92 answered 2 months ago

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