Question
In: Accounting
On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed,...
On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $1,161,000 in cash and stock options. At the acquisition date, NetSpeed had common stock of $1,220,000 and Retained Earnings of $61,000. The acquisition-date fair value of the 10 percent noncontrolling interest was $129,000. QuickPort attributed the $9,000 excess of NetSpeed's fair value over book value to a database with a five-year remaining life.
During the next two years, NetSpeed reported the following:
| Net Income | Dividends Declared | |||||
| 2020 | $ | 12,600 | $ | 1,800 | ||
| 2021 | 18,000 | 1,800 | ||||
On July 1, 2020, QuickPort sold communication equipment to NetSpeed for $15,000. The equipment originally cost $18,500 and had accumulated depreciation of $5,300 and an estimated remaining life of three years at the date of the intra-entity transfer.
- Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2021.
- Prepare the worksheet adjustments for the December 31, 2021, consolidation of QuickPort and NetSpeed.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed,...
On January 1, 2020, QuickPort Company acquired 90 percent of the
outstanding voting stock of NetSpeed, Inc., for $1,152,000 in cash
and stock options. At the acquisition date, NetSpeed had common
stock of $1,210,000 and Retained Earnings of $60,500. The
acquisition-date fair value of the 10 percent noncontrolling
interest was $128,000. QuickPort attributed the $9,500 excess of
NetSpeed's fair value over book value to a database with a
five-year remaining life.
During the next two years, NetSpeed reported the following:...
On January 1, 2017, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed,...
On January 1, 2017, QuickPort Company acquired 90 percent of the
outstanding voting stock of NetSpeed, Inc., for $855,000 in cash
and stock options. At the acquisition date, NetSpeed had common
stock of $860,000 and Retained Earnings of $43,000. The
acquisition-date fair value of the 10 percent noncontrolling
interest was $95,000. QuickPort attributed the $47,000 excess of
NetSpeed's fair value over book value to a database with a
five-year remaining life.
During the next two years, NetSpeed reported the following:...
On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing,...
On January 1, 2020, Corgan Company acquired 70 percent of the
outstanding voting stock of Smashing, Inc., for a total of
$1,435,000 in cash and other consideration. At the acquisition
date, Smashing had common stock of $920,000, retained earnings of
$470,000, and a noncontrolling interest fair value of $615,000.
Corgan attributed the excess of fair value over Smashing's book
value to various covenants with a 20-year remaining life. Corgan
uses the equity method to account for its investment in
Smashing....
On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing,...
On January 1, 2020, Corgan Company acquired 70 percent of the
outstanding voting stock of Smashing, Inc., for a total of $910,000
in cash and other consideration. At the acquisition date, Smashing
had common stock of $770,000, retained earnings of $320,000, and a
noncontrolling interest fair value of $390,000. Corgan attributed
the excess of fair value over Smashing's book value to various
covenants with a 20-year remaining life. Corgan uses the equity
method to account for its investment in Smashing....
On January 1, 2020, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing,...
On January 1, 2020, Corgan Company acquired 80 percent of the
outstanding voting stock of Smashing, Inc., for a total of
$1,600,000 in cash and other consideration. At the acquisition
date, Smashing had common stock of $910,000, retained earnings of
$460,000, and a noncontrolling interest fair value of $400,000.
Corgan attributed the excess of fair value over Smashing's book
value to various covenants with a 20-year remaining life. Corgan
uses the equity method to account for its investment in
Smashing....
On January 1, 2020, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing,...
On January 1, 2020, Corgan Company acquired 80 percent of the
outstanding voting stock of Smashing, Inc., for a total of
$1,600,000 in cash and other consideration. At the acquisition
date, Smashing had common stock of $910,000, retained earnings of
$460,000, and a noncontrolling interest fair value of $400,000.
Corgan attributed the excess of fair value over Smashing's book
value to various covenants with a 20-year remaining life. Corgan
uses the equity method to account for its investment in
Smashing....
On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing,...
On January 1, 2020, Corgan Company acquired 70 percent of the
outstanding voting stock of Smashing, Inc., for a total of
$1,225,000 in cash and other consideration. At the acquisition
date, Smashing had common stock of $860,000, retained earnings of
$410,000, and a noncontrolling interest fair value of $525,000.
Corgan attributed the excess of fair value over Smashing's book
value to various covenants with a 20-year remaining life. Corgan
uses the equity method to account for its investment in
Smashing....
On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing,...
On January 1, 2020, Corgan Company acquired 70 percent of the
outstanding voting stock of Smashing, Inc., for a total of
$1,505,000 in cash and other consideration. At the acquisition
date, Smashing had common stock of $940,000, retained earnings of
$490,000, and a noncontrolling interest fair value of $645,000.
Corgan attributed the excess of fair value over Smashing's book
value to various covenants with a 20-year remaining life. Corgan
uses the equity method to account for its investment in Smashing....
n January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing,...
n January 1, 2020, Corgan Company acquired 70 percent of the
outstanding voting stock of Smashing, Inc., for a total of
$1,155,000 in cash and other consideration. At the acquisition
date, Smashing had common stock of $840,000, retained earnings of
$390,000, and a noncontrolling interest fair value of $495,000.
Corgan attributed the excess of fair value over Smashing's book
value to various covenants with a 20-year remaining life. Corgan
uses the equity method to account for its investment in
Smashing....
Placid Lake Corporation acquired 90 percent of the outstanding voting stock of Scenic, Inc., on January...
Placid Lake Corporation acquired 90 percent of the outstanding
voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a
net book value of $490,000. Any excess fair value was assigned to
intangible assets and amortized at a rate of $7,000 per year.
Placid Lake's 2018 net income before consideration of its
relationship with Scenic (and before adjustments for intra-entity
sales) was $390,000. Scenic reported net income of $200,000. Placid
Lake declared $190,000 in dividends during this period;...
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