On January 2,2014,pbl Enterprises Purchased 90% of Santos Incorporated Outstanding
On January 2,2014,PBL Enterprises purchased 90% of Santos Incorporated outstanding common stock for $1,687,500 cash.Santos' net assets had a book value of $1,300,000 at the time.A building with a 15-year remaining life and a book value of $100,000 had a fair value of $175,000.Any other excess amount was attributed to goodwill.PBL reported net income for the first year of $350,000 (without regard for its ownership in Santos),while Santos had $175,000 in earnings.
1.Calculate the amount of goodwill related to this acquisition as reported on the consolidated balance sheet at January 2,2014.
2.Calculate the amount of consolidated net income for the year ended December 31,2014.
3.What is the amount that will be assigned to the building on the consolidated balance sheet at the date of acquisition?
On December 31,2014,Patenne Incorporated purchased 60% of Smolin Manufacturing for $300,000.The book value and fair value of Smolin's assets and liabilities were equal with the exception of plant assets which were undervalued by $60,000 and had a remaining life of 10 years,and a patent which was undervalued by $40,000 and had a remaining life of 5 years.At December 31,2016,the companies showed the following balances on their respective adjusted trial balances:
Requirement 1: Calculate the balance in the Plant assets - net and the Patent accounts on the consolidated balance sheet as of December 31,2016.
Requirement 2: Calculate consolidated net income for 2016,and the amount allocated to the controlling and noncontrolling interests.
Requirement 3: Calculate the balance of the noncontrolling interest in Smolin to be reported on the consolidated balance sheet at December 31,2016.
Pull Incorporated and Shove Company reported summarized balance sheets as shown below,on December 31,2014.
On January 1,2015,Pull purchased 70% of the outstanding capital stock of Shove for $392,000,of which $92,000 was paid in cash,and $300,000 was borrowed from their bank.The debt is to be repaid in 10 annual installments beginning on December 31,2015,with each payment consisting of $30,000 principal,plus accrued interest.
The excess fair value of Shove Company over the underlying book value is allocated to inventory (60 percent)and to goodwill (40 percent).
Required: Calculate the balance in each of the following accounts,on the consolidated balance sheet,immediately following the acquisition.
On January 2,2014,Paleon Packaging purchased 90% of the outstanding common stock of Sampson Shipping and Supplies for $513,000.Sampson's book values represented the fair values of all recorded assets and liabilities at that date,however Sampson had rights to a patent that was not recorded on their books,with an approximate fair value of $270,000,and a 10-year remaining useful life.Sampson's shareholders' equity reported on that date consisted of $100,000 in capital stock and $150,000 in retained earnings.Any remaining fair value/book value differential is assumed to be goodwill.The December 31,2015 financial statements for each of the companies are provided in the worksheet below.
Required: Complete the consolidation worksheet provided below to determine consolidated balances to be reported at December 31,2015.