On January 1, Beckman, Inc., purchases 60 percent of the outstanding stock of Calvin for $36,000. Calvin Co. has one recorded asset, a specialized production machine with a book value of $10,000. For each of the following noncontrolling interest concepts, what amounts should Beckman report in its consolidated financial statements for noncontrolling interest in subsidiary income, end-of-year total noncontrolling interest, Calvin's machine (net of accumulated depreciation), and the process trade secret.
Not what you're looking for?
(See attached file for full problem description)
---
22. On January 1, Beckman, Inc., purchases 60 percent of the outstanding stock of Calvin for $36,000. Calvin Co. has one recorded asset, a specialized production machine with a book value of $10,000.The fair market value of the machine is $50,000, and the remaining useful life is estimated to be 10 years. Any remaining excess cost is attributable to an unrecorded process trade secret with an estimated future life of 4 years.
At the end of the year, Calvin reports the following in its financial statements:
Revenues $50,000 Machine $ 9,000 Common stock $10,000
Expenses 20,000 Other assets 26,000 Retained earnings 25,000
Net income $30,000 Total assets $35,000 Total equity $35,000
Dividends paid $ 5,000
For each of the following noncontrolling interest concepts, what amounts should Beckman report in
its consolidated financial statements for noncontrolling interest in subsidiary income, end-of-year
total noncontrolling interest, Calvin's machine (net of accumulated depreciation), and the process
trade secret.
a. Parent company concept.
b. Proportionate consolidation concept.
c. Economic unit concept.
Purchase this Solution
Solution Summary
Calculation shown for you. I have also provided necessary explanatory notes and calculations where necessary. No references.
Purchase this Solution
Free BrainMass Quizzes
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Basics of corporate finance
These questions will test you on your knowledge of finance.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.