Question
In: Accounting
PART D: Several years ago Polar Inc. acquired an 80% interest in Icecap Co. The book...
PART D:
Several years ago Polar Inc. acquired an 80% interest in Icecap Co. The book values of Icecap's asset and liability accounts at that time were considered to be equal to their fair values. Polar’s acquisition value corresponded to the underlying book value of Icecap so that no allocations or goodwill resulted from the transfer.
The following selected account balances were from the individual financial records of these two companies as of December 31, 2018:
Assume that Icecap sold inventory to Polar at a markup equal to 25% of cost. Intra-entity transfers were $70,000 in 2017 and $112,000 in 2018. Of this inventory, $29,000 of the 2017 transfers were retained and then sold by Polar in 2018, whereas $49,000 of the 2018 transfers was held until 2019.
Required:
For the consolidated financial statements for 2018, determine the balances that would appear for the following accounts: (i) Cost of Goods Sold; (ii) Inventory; and (iii) Net income attributable to the noncontrolling interest.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Several years ago Polar Inc. acquired an 80% interest in Icecap Co. The book values of...
Several years ago Polar Inc. acquired an 80% interest in Icecap
Co. The book values of Icecap's asset and liability accounts at
that time were considered to be equal to their fair values. Polar’s
acquisition value corresponded to the underlying book value of
Icecap so that no allocations or goodwill resulted from the
transfer. The following selected account balances were from the
individual financial records of these two companies as of December
31, 2018: Assume that Icecap sold inventory to...
1Several years ago Polar Inc. acquired an 80% interest in Icecap Co. The book values of...
1Several years ago Polar Inc. acquired an 80% interest in Icecap
Co. The book values of Icecap's asset and liability accounts at
that time were considered to be equal to their fair values. Polar’s
acquisition value corresponded to the underlying book value of
Icecap so that no allocations or goodwill resulted from the
transfer.
The following selected account balances were from the individual
financial records of these two companies as of December 31,
2018:
Polar
Icecap
Inc.
Co.
Sales
$896,000...
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Albuquerque, Inc., acquired 24,000 shares of Marmon Company
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several years ago for $780,000. At the acquisition date, Marmon
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fair value of the noncontrolling interest at $32,500. Any excess of
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several years ago for $750,000. At the acquisition date, Marmon
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fair value of the noncontrolling interest at $250,000. Any excess
of acquisition-date fair value over book value was assigned to
broadcast licenses with indefinite lives. Since the acquisition
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Albuquerque, Inc., acquired 24,000 shares of Marmon Company
several years ago for $720,000. At the acquisition date, Marmon
reported a book value of $870,000, and Albuquerque assessed the
fair value of the noncontrolling interest at $180,000. Any excess
of acquisition-date fair value over book value was assigned to
broadcast licenses with indefinite lives. Since the acquisition
date and until this point, Marmon has issued no additional shares.
No impairment has been recognized for the broadcast licenses. At
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Albuquerque, Inc., acquired 24,000 shares of Marmon Company several years ago for $720,000. At the acquisition...
Albuquerque, Inc., acquired 24,000 shares of Marmon Company
several years ago for $720,000. At the acquisition date, Marmon
reported a book value of $500,000, and Albuquerque assessed the
fair value of the noncontrolling interest at $30,000. Any excess of
acquisition-date fair value over book value was assigned to
broadcast licenses with indefinite lives. Since the acquisition
date and until this point, Marmon has issued no additional shares.
No impairment has been recognized for the broadcast licenses.
At the present time,...
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