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In: Accounting

On January 1, 20X8, Package Company acquired 80 percent of Stamp Company's common stock for $280,000...

On January 1, 20X8, Package Company acquired 80 percent of Stamp Company's common stock for $280,000 cash. At that date, Stamp reported common stock outstanding of $200,000 and retained earnings of $100,000, and the fair value of the noncontrolling interest was $70,000. The book values and fair values of Stamp's assets and liabilities were equal, except for other intangible assets which had a fair value $50,000 greater than book value and an 8-year remaining life. Stamp reported the following data for 20X8 and 20X9:

Stamp Corporation

Year

Net Income

Comprehensive

Income

Dividends

Paid

20X8

$

25,000

$

30,000

$

5,000

20X9

35,000

45,000

10,000

Package reported net income of $100,000 and paid dividends of $30,000 for both the years.

43) Based on the preceding information, what is the amount of consolidated comprehensive income reported for 20X8?

A) $125,000

B) $123,750

C) $118,750

D) $130,000

44) Based on the preceding information, what is the amount of consolidated comprehensive income reported for 20X9?

A) $145,000

B) $135,000

C) $138,750

D) $128,750

45) Based on the preceding information, what is the amount of comprehensive income attributable to the controlling interest for 20X8?

A) $123,750

B) $118,750

C) $119,000

D) $104,000

46) Based on the preceding information, what is the amount of comprehensive income attributable to the controlling interest for 20X9?

A) $138,750

B) $131,000

C) $128,750

D) $135,000

I highlighted the answers please explain using clear math steps how to arrive at that answer

Solutions

Expert Solution

43 The amount of consolidated Comprehensive income reported for 20X8
Comprehensive income of Stamp Corporation $30,000
Less: Annual amortization of intangible assets acquired on acqiuisition (50000/8) $6,250
Comprehensive income of Stamp Corporation after adjustment $23,750
Net income of Package Company $100,000
Consolidated comprehensive income $123,750
44 The amount of consolidated Comprehensive income reported for 20X9
Comprehensive income of Stamp Corporation $45,000
Less: Annual amortization of intangible assets acquired on acqiuisition (50000/8) $6,250
Comprehensive income of Stamp Corporation after adjustment $38,750
Net income of Package Company $100,000
Consolidated comprehensive income $138,750
45 The amount of comprehensive income attributable to the controlling interest for 20X8
Comprehensive income of Stamp Corporation $30,000
Less: Annual amortization of intangible assets acquired on acqiuisition (50000/8) $6,250
Comprehensive income of Stamp Corporation after adjustment $23,750
Income attributable to controlling interest (80%) $19,000
Net income of Package Company $100,000
Comprehensive income attributable to the controlling interest $119,000
46 The amount of comprehensive income attributable to the controlling interest for 20X9
Comprehensive income of Stamp Corporation $45,000
Less: Annual amortization of intangible assets acquired on acqiuisition (50000/8) $6,250
Comprehensive income of Stamp Corporation after adjustment $38,750
Income attributable to controlling interest (80%) $31,000
Net income of Package Company $100,000
Comprehensive income attributable to the controlling interest $131,000

ekkarill92 answered 2 years ago
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