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ProForm acquired 80 percent of ClipRite on June 30, 2020, for $1,520,000 in cash. Based on ClipRite's acquisition-date fair value, an unrecorded intangible of $500,000 was recognized and is being amortized at the rate of $17,000 per year. No goodwill was recognized in the acquisition. The noncontrolling interest fair value was assessed at $380,000 at the acquisition date. The 2021 financial statements are as follows:
ProForm | ClipRite | ||||||
Sales | $ | (1,010,000 | ) | $ | (1,020,000 | ) | |
Cost of goods sold | 640,000 | 505,000 | |||||
Operating expenses | 310,000 | 205,000 | |||||
Dividend income | (48,000 | ) | 0 | ||||
Net income | $ | (108,000 | ) | $ | (310,000 | ) | |
Retained earnings, 1/1/21 | $ | (3,000,000 | ) | $ | (1,060,000 | ) | |
Net income | (108,000 | ) | (310,000 | ) | |||
Dividends declared | 310,000 | 60,000 | |||||
Retained earnings, 12/31/21 | $ | (2,798,000 | ) | $ | (1,310,000 | ) | |
Cash and receivables | $ | 610,000 | $ | 510,000 | |||
Inventory | 500,000 | 910,000 | |||||
Investment in ClipRite | 1,520,000 | 0 | |||||
Fixed assets | 2,000,000 | 1,650,000 | |||||
Accumulated depreciation | (200,000 | ) | (200,000 | ) | |||
Totals | $ | 4,430,000 | $ | 2,870,000 | |||
Liabilities | $ | (832,000 | ) | $ | (760,000 | ) | |
Common stock | (800,000 | ) | (800,000 | ) | |||
Retained earnings, 12/31/21 | (2,798,000 | ) | (1,310,000 | ) | |||
Totals | $ | (4,430,000 | ) | $ | (2,870,000 | ) | |
ProForm | ClipRite | ||||||
Sales | $ | (1,010,000 | ) | $ | (1,020,000 | ) | |
Cost of goods sold | 640,000 | 505,000 | |||||
Operating expenses | 310,000 | 205,000 | |||||
Dividend income | (48,000 | ) | 0 | ||||
Net income | $ | (108,000 | ) | $ | (310,000 | ) | |
Retained earnings, 1/1/21 | $ | (3,000,000 | ) | $ | (1,060,000 | ) | |
Net income | (108,000 | ) | (310,000 | ) | |||
Dividends declared | 310,000 | 60,000 | |||||
Retained earnings, 12/31/21 | $ | (2,798,000 | ) | $ | (1,310,000 | ) | |
Cash and receivables | $ | 610,000 | $ | 510,000 | |||
Inventory | 500,000 | 910,000 | |||||
Investment in ClipRite | 1,520,000 | 0 | |||||
Fixed assets | 2,000,000 | 1,650,000 | |||||
Accumulated depreciation | (200,000 | ) | (200,000 | ) | |||
Totals | $ | 4,430,000 | $ | 2,870,000 | |||
Liabilities | $ | (832,000 | ) | $ | (760,000 | ) | |
Common stock | (800,000 | ) | (800,000 | ) | |||
Retained earnings, 12/31/21 | (2,798,000 | ) | (1,310,000 | ) | |||
Totals | $ | (4,430,000 | ) | $ | (2,870,000 | ) | |
(Note: Parentheses indicate a credit balance.)
ClipRite sold ProForm inventory costing $90,000 during the last six months of 2020 for $300,000. At year-end, 30 percent remained. ClipRite sold ProForm inventory costing $305,000 during 2021 for $460,000. At year-end, 10 percent is left.
Determine the consolidated balances for the following: (Input all amounts as positive values.)
Sales
Cost of Goods Sold
Operating Expenses
Dividend Income
Net Income Attributable to Noncontrolling Interest
Inventory
Noncontrolling Interest in Subsidiary, 12/31/21
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