On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Cal

Question

On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $58,704. Calvin Co. has one recorded asset, a specialized production machine with a book value of $13,100 and no liabilities. The fair value of the machine is $85,600, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin’s total acquisition date fair value is $97,840. At the end of the year, Calvin reports the following in its financial statements: Revenues $ 61,650 Machine $ 11,790 Common stock $ 10,000 Expenses 29,250 Other assets 25,610 Retained earnings 27,400 Net income $ 32,400 Total assets $ 37,400 Total equity $ 37,400 Dividends paid $ 5,000 Determine the amounts that Beckman should report in its year-end consolidated financial statements for:

1. noncontrolling interest in subsidiary income,

2. noncontrolling interest

The answer of 12,960 for #1 is not correct. I don't know what else it can be, but it's wrong.

Explanation / Answer

1.

revenue 61650

expense (29250)

dividend (5000)

depriciation (1310)

net income 26090

non controlling interest i.e. 40% = 26090*.40 = $10436

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