On January 1, 2013 Joseph, Inc. acquired 80% of Allen Company in exchange for $2
ID: 2499609 • Letter: O
Question
On January 1, 2013 Joseph, Inc. acquired 80% of Allen Company in exchange for $2,250,000 fair-value consideration. The total fair value of Allen Company was assessed at $2,400,000. Joseph computed annual excess fair-value amortization of $16,000 based on the difference between Allen’s total fair value and its underlying net asset fair value. The subsidiary reported earnings of $150,000 in 2013 and $195,000 in 2014 with dividend payments of $42,000 each year. Apart from its investment in Allen Company, Joseph had income of $450,000 in 2013 and $575,000 in 2014.
How much is the acquisition date excess fair value amortization?
How much is the non-controlling interest fair value on 1/1/2013?
How much is 2013 income to NCI?
How much is 2013 dividends to NCI?
How much is the non-controlling interest reported value at December 31, 2013?
How much is the 2014 income to NCI?
How much is the consolidated Net Income for 2014?
How much is the non-controlling interest reported value at 12/31/14?
Explanation / Answer
1.
2. Non controlling Interest fair value = 20% of 2,400,000 = 480,000
3. 2013 income to NCI = 20% OF 150,000 = 30,000
4. 2013 Dividends to NCI = 20% of 42,000 = 8,400
5. NCI reported value as of Dec 31, 2013
6. 2014 Income to NCI = 20% OF 195000 = 39,000
7. Consolidated income for 2014:
8. NCI as of 12/31/14:
Total fair value 2,400,000 80% of the fair value 1,920,000 Amount paid 2,250,000 Excess paid - to be amortized 330,000Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.