Manji On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $36,000. Calvin Co. has one recorded asset, aspecialized production machine with a book value of $10,000 and no liabilities. The fair value of the machine is $50,000, and theremaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secretwith an estimated future life of 4 years. Calvin's total acquisition date fair value is $60,000.At the end of the year, Calvin reports the following in its financial statements:RevenuesExpensesNet incomeDividends paid$ 50,00020,000$ 30,000MachineOther assetsTotal assets$ 9,00026,000$35,000Common stockRetained earnings$ 10,000Total equity25,000$35,000$ 5,000Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest insubsidiary income, noncontrolling interest, Calvin's machine (net of accumulated depreciation), and the process trade secret.Noncontrolling interest in subsidiary incomeTotal noncontrolling interestCalvin's machine (net accumulated depreciation)Process trade secretAmount

Approach to solving the question: Identify Relevant Information:Begin by identifying the key…

Answered: On January 1, Beckman, Inc., acquires…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 62P

See similar textbooks

Similar questions

On January 1, Beckman, Inc., acquires 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 and no liabilities. The fair value of the machine is $50,000, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin's total acquisition date fair value is $60,000. At the end of the year, Calvin reports the following in its financial statements: $ 50,000 20,000 $ 30,000 $ 9,000 26,000 $ 10,000 25,000 $ 35,000 Revenues Machine Common stock Expenses Other assets Retained earnings Net income Total assets $ 35,000 Total equity Dividends paid $ 5,000 Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin's machine (net of accumulated…
On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $47,052. Calvin Co. has one recorded asset, a specialized production machine with a book value of $10,000 and no liabilities. The fair value of the machine is $66,500, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin’s total acquisition date fair value is $78,420. At the end of the year, Calvin reports the following in its financial statements: Revenues $ 54,750 Machine $ 9,000 Common stock $ 10,000 Expenses 22,200 Other assets 28,550 Retained earnings 27,550 Net income $ 32,550 Total assets $ 37,550 Total equity $ 37,550 Dividends paid $ 5,000 Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest…
On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $58,884. Calvin Co. has one recorded asset, a specialized production machine with a book value of $15,100 and no liabilities. The fair value of the machine is $88,100, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin's total acquisition date fair value is $98,140. At the end of the year, Calvin reports the following in its financial statements: $ 65,550 29,250 Machine Other assets $ 13,590 32,810 Common stock Retained earnings $ 15,100 31, 300 $ 46,400 Revenues Expenses Net income $ 36,300 Total assets $ 46,400 Total equity Dividends paid $ 5,000 Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin's machine (net of accumulated…
On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $41,568. Calvin Co. has one recorded asset, a specialized production machine with a book value of $14,200 and no liabilities. The fair value of the machine is $59,200, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin's total acquisition date fair value is $69,280. At the end of the year, Calvin reports the following in its financial statements: Revenues Expenses Net income Dividends paid $ 68,250 26,400 $ 41,850 $ 5,000 Machine Other assets Total assets Noncontrolling interest in subsidiary income Total noncontrolling interest Calvin's machine (net accumulated depreciation) Process trade secret $ $ Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income,…
On January 1, Beckman, Inc., acquires 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 and no liabilities. The fair value of the machine is $50,000, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of four years. Calvin’s total acquisition-date fair value is $60,000.At the end of the year, Calvin reports the following in its financial statements:Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin’s machine (net of accumulated depreciation), and the process trade secret.
On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $48,900. Calvin Co. has one recorded asset, a specialized production machine with a book value of $15,600 and no liabilities. The fair value of the machine is $68,100, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin's total acquisition date fair value is $81,500. At the end of the year, Calvin reports the following in its financial statements: $ 55,350 22,650 $ 32,700 $ 5,000 Machine Other assets $ 14,040 29, 260 $ 15,600 27,700 $ 43,300 Revenues Common stock Expenses Retained earnings Net income Total assets $ 43,300 Total equity Dividends paid Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin's machine (net of accumulated…
On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $47,220. Calvin Co. has one recorded asset, a specialized production machine with a book value of $16,000 and no liabilities. The fair value of the machine is $68,500, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin's total acquisition date fair value is $78,700. At the end of the year, Calvin reports the following in its financial statements: Revenues Expenses Net income Dividends paid $ 65,250 30,150 $ 35,100 $ 5,000 Machine Other assets Total assets Noncontrolling interest in subsidiary income Total noncontrolling interest Calvin's machine (net accumulated depreciation) Process trade secret $ 14,400 31,700 $ 46,100 Amount Common stock Retained earnings Total equity Determine the amounts that Beckman should report in its year-end consolidated financial…
On June 28, Holly Co. acquired 100% of the common stock of Michael Co. The purchase price allocation included the following items: $5.1 million for a patent; $4.1 million for a trademark; $3.1 million for in-process research and development; $6.1 million for goodwill. Flax's policy is to amortize intangible assets using the straight- line method, no residual value, using a five-year useful life. REQUIRED: What is the total amount of expenses (ignoring taxes) that would appear on Flax's income statement for the year ended December 31 related to these items.
On March 31, 2021, JISOO Company purchased 32,000 shares of the 40,000 outstanding shares of ROSECompany at a price of P1,200,000 with an excess of P30,000 over the book value of ROSE Company’snet assets. P13,000 of the excess is attributed to an undervalued equipment with a remaining usefullife of 10 years from the date of acquisition and the rest of the amount is attributed to goodwill. Forthe year 2021, JISOO Company reported a net income of P750,000 and paid dividends of P180,000.While ROSE Company reported a net income of P240,000 which was evenly earned during the yearand paid dividends to JISOO Company amounting to P39,000. Goodwill was not impaired in 2021.The retained earnings of JISOO Company at the end of 2021 per books is P1,025,000. JISOO Companyuses the cost method to account for its investment in ROSE Company. Non-controlling interest ismeasured at fair market value. Requirement:Compute for the non-controlling interest in net assets on December 31, 2021.
On January 1, Beckman, Incorporated, acquires 60 percent of the outstanding stock of Calvin for $59,232. Calvin Company has one recorded asset, a specialized production machine with a book value of $19,500 and no liabilities. The fair value of the machine is $87,000, and the remaining useful life is estimated to be 10 years. Any remaining excess fair value is attributable to an unrecorded process trade secret with an estimated future life of 4 years. Calvin's total acquisition date fair value is $98,720. At the end of the year, Calvin reports the following in its financial statements: Revenues Expenses $ 65,550 26,100 Net income Dividends paid $ 39,450 Machine Other assets Total assets $ 17,550 36,400 $ 53,950 Common stock Retained earnings Total equity $ 19,500 34,450 $ 53,950 $ 5,000 Required: Determine the amounts that Beckman should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Calvin's machine…
On June 28, Lexicon Corporation acquired 100% of the common stock of Gulf & Eastern. The purchase price allocation included the following items: $4 million, patent; $3 million, developed technology; $2 million, indefinite-life trademark; $5 million, goodwill. Lexicon’s policy is to amortize intangible assets using the straight-line method, no residual value, and a five-year useful life. What is the total amount of expenses (ignoring taxes) that would appear in Lexicon’s income statement for the year ended December 31 related to these items?
The Siri Company acquired equipment on January 1, 2015 at a cost of P400,000, depreciating it over 8 years with a nil residual value. On January 1, 2018. The Triss Company acquired 100% of Siri and estimated the fair value of the equipment at P230,000 with a remaining life of 5 years. This fair value was not incorporated into Siri’s books and the depreciation expense continued to be calculated by reference to original cost. What adjustments should be made to the depreciation expense for the year and the statement of financial position carrying amount in preparing the consolidated financial statements for the year ended December 31, 2019? DEPRECIATION EXPENSE -decrease by P4,000 ; CARRYING AMOUNT - decreased by P12,000 DEPRECIATION EXPENSE -decreased by P4,000 ; CARRYING AMOUNT - increased by P12,000 DEPRECIATION EXPENSE -increase by P4,000 ; CARRYING AMOUNT - decreased by P12,000 DEPRECIATION EXPENSE…

SEE MORE QUESTIONS

Recommended textbooks for you

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L