Consolidating firms: What is the consolidated balance of the Equipment account?
Not what you're looking for?
PARENT COMPANY CONCEPT
David Company Book Value
Current Assets: $620,000
Equipment: $260,000
Buildings: $410,000
Liabilities:($390,000)
Revenues: ($900,000)
Expenses: $500,000
Investment income: not given
Mark Company Book Value
Current assets: $300,000
Equipment: $200,000
Buildings: $150,000
Liabilities: ($120,000)
Revenues: ($400,000)
Expenses: $300,000
Mark Company Fair Market Value
Current assets: $320,000
Equipment: $280,000
Buildings: $150,000
Liabilities: ($120,000)
Use the following information for Problems 12 through 14:
David Company acquired 60 percent of Mark Company for $300,000 when Mark's book value was $400,000. On that date, Mark had equipment (with a 10-year life) that was undervalued in the financial records by $60,000. Also, buildings (with a 20-year life) were undervalued by $40,000. Two years later, the following figures are reported by these two companies (stockholders' equity accounts have been
omitted).
12. What is consolidated net income prior to the reduction for the Noncontrolling interest's share of the subsidiary's income?
a. $455,200
b. $494,000
c. $497,000
d. $495,200
13. What is the Noncontrolling interest's share of the subsidiary's income and what is the ending balance of the Noncontrolling interest in the subsidiary?
a. $42,000 and $252,000
b. $40,000 and $212,000
c. $38,080 and $208,160
d. $35,200 and $207,200
14. What is the consolidated balance of the Equipment account?
a. $488,800
b. $498,400
c. $500,800
d. $508,000
Purchase this Solution
Solution Summary
Guidance on solving these problems is given and computations.
Purchase this Solution
Free BrainMass Quizzes
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.