Question

In: Accounting

On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000...

On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez’s financial records, were estimated to have a 20-year future life.

As of December 31, the financial statements appeared as follows:

Jarel Suarez
Revenues $ (300,000 ) $ (200,000 )
Cost of goods sold 140,000 80,000
Expenses 20,000 10,000
Net income $ (140,000 ) $ (110,000 )
Retained earnings, 1/1 $ (300,000 ) $ (150,000 )
Net income (140,000 ) (110,000 )
Dividends declared 0 0
Retained earnings, 12/31 $ (440,000 ) $ (260,000 )
Cash and receivables $ 210,000 $ 90,000
Inventory 150,000 110,000
Investment in Suarez 260,000 0
Equipment (net) 440,000 300,000
Total assets $ 1,060,000 $ 500,000
Liabilities $ (420,000 ) $ (140,000 )
Common stock (200,000 ) (100,000 )
Retained earnings, 12/31 (440,000 ) (260,000 )
Total liabilities and equities $ (1,060,000 ) $ (500,000 )

Included in the preceding statements, Jarel sold inventory costing $80,000 to Suarez for $100,000. Of these goods, Suarez still owns 60 percent on December 31.

What is the total of consolidated cost of goods sold?

What is the total of consolidated expenses?

What is the consolidated total of noncontrolling interest appearing on the balance sheet?

Solutions

Expert Solution


Related Solutions

On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000...
On January 1, Jarel acquired 80 percent of the outstanding voting stock of Suarez for $260,000 cash consideration. The remaining 20 percent of Suarez had an acquisition-date fair value of $65,000. On January 1, Suarez possessed equipment (five-year remaining life) that was undervalued on its books by $25,000. Suarez also had developed several secret formulas that Jarel assessed at $50,000. These formulas, although not recorded on Suarez's financial records, were estimated to have a 20-year future life. As of December...
On January 1, 2016, Plymouth Corporation acquired 80 percent of the outstanding voting stock of Sander...
On January 1, 2016, Plymouth Corporation acquired 80 percent of the outstanding voting stock of Sander Company in exchange for $1,200,000 cash. At that time, although Sander’s book value was $925,000, Plymouth assessed Sander’s total business fair value at $1,500,000. Since that time, Sander has neither issued nor reacquired any shares of its own stock. The book values of Sander's individual assets and liabilities approximated their acquisition-date fair values except for the patent account, which was undervalued by $350,000. The...
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, 2017, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing,...
On January 1, 2017, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,560,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $900,000, retained earnings of $450,000, 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....
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $488,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $735,000 and the fair value of the 20 percent noncontrolling interest was $122,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the individual financial records of these two...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $440,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $615,000 and the fair value of the 20 percent noncontrolling interest was $110,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the individual financial records of these two...
On January 1, 2017, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing,...
On January 1, 2017, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,080,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $780,000, retained earnings of $330,000, and a noncontrolling interest fair value of $270,000. 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....
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2017, for $428,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft's identifiable assets and liabilities at a collective net fair value of $585,000 and the fair value of the 20 percent noncontrolling interest was $107,000. No excess fair value over book value amortization accompanied the acquisition. The following selected account balances are from the individual financial records of these two...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1,...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on January 1, 2014, for $416,000 in cash and other consideration. At the acquisition date, Protrade assessed Seacraft’s identifiable assets and liabilities at a collective net fair value of $555,000 and the fair value of the 20 percent noncontrolling interest was $104,000. No excess fair value over book value amortization accompanied the acquisition.      The following selected account balances are from the individual financial records of these two...
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....
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT