| | a Search Chapter 5h Check my work On January 1,. 2017, QuickPort Company acq
ID: 2548682 • Letter: #
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| | a Search Chapter 5h Check my work On January 1,. 2017, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $1,035,000 in cash and stock options. At the acquisition date, NetSpeed had common stock of $1,090.000 and Retained Earnings of $54,500. The acquisition-date fair value of the 10 percent noncontrolling interest was $115,000 QuickPort attributed the $5,500 excess of NetSpeed's fair value over book value to a database with a five-year remaining life 33.33 points During the next two years, NetSpeed reported the followin Net Income Declared 2017 $7,700 1,100 2018 11,000.100 On July 1, 2017, QuickPort sold com accumulated depreciation of $15,900 and an estimated remaining ife of three years at the date of the intra-entity tr nmunication equipment to NetSpeed for $8.500. The equipment originally cost $22,000 and had . Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc, account as of Decembes 31, 2018 b. Prepare the worksheet adjustments for the December 31, 2018, consolidation of QuickPort a nd NetSpeed Complete this question by entering your answers in the tabs below Required A Required B Prey 10f 3 Next > HillExplanation / Answer
Solution :-
(a). Investment Account:
B. Answer
$19,125
6. Prepare entry E
Particulars Amount Amount Consideration paid (Fair Value 1/1/2017) $1,035,000 Netspeed's reported Net income for 2017 $7,700 Database amortisation ($5500 ÷ 5years) ($1,100) Netspeed's adjusted Net Income $6,600 Quickports ownership percentage 90% Quickports share of Netspeed's Net income $5940 Gain on equipment transfer deferral ($22,000 - $8500) × 6/12 ($6750) Depreciation adjustment (6months) $1125 Equity earnings in Netspeed's company ($5940 - $6750 +$1125) $315 Quickports share of Netspeed's dividends (90%) ($990) Balance 12/31/17 ($1,035,000 + $315 - $990) $1,034,325 Netspeed's reported income for 2018 $11,000 Database amortisation ($5500 ÷ 5years) ($1,100) Netspeed's adjusted 2018 Net income $9,900 Quickports ownership percentage 90% Quickports share of Netspeed's Net income $8910 Depreciation adjustment ($15,900 - $1100) ($14800) Equity in earnings of Netspeed's company, 2018 ($5890) Quickports share of Netspeed's dividends, 2018 ($990) Balance as on 12/31/18 $1,027,545Related Questions
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