Question

The noncontrolling interest in subsidiary income and total non controlling interest

On January 1, Beckman, Inc., acquires 60 percent of the outstanding stock of Calvin for $51,612. Calvin Co. has one recorded asset, a specialized production machine with a book value of $19,200 and no liabilities. The fair value of the machine is $75,700, 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 $86,020.

At the end of the year, Calvin reports the following in its financial statements:

Revenues	$	73,350		Machine	$	17,280		Common stock	$	10,000
Expenses		29,700		Other assets		31,370		Retained earnings		38,650
Net income	$	43,650		Total assets	$	48,650		Total equity	$	48,650
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 depreciation), and the process trade secret.

Solve:

Noncontrolling Interest om subsidiary income:

Total noncontrolling interest:

Answer 1

solution Determination of the accounts. Amount for your rend (onsdidatod fencincial statemente? Calculate the non-controlling interest in subeldiaay income as follows: particulas Revenue less expenses (29,000 7.8 5,650+$2,580 Income Non-controlling Pinte asts: percentage Non-contaaling Pinterest in Subellicay Amount (Inf) *73,350 $37,230 138,470 407. Oncome $15,388 Donicing: calculate depreciation expense on machine Depreciation expense of machine fair value of machine-Bools value Estimated life . = $75,700 - $19,200 . 10 - $ 56,500 10 $ 5,650]

Calculate amortization expense on process taade secaets fainvalue - Machine value Amortization of process trade secaets : * estimated value. future life = $86,020 - $ 175,900 $ 10,320 ! 4 $2,580 company B will be repout $15,388 as the amount for non controlling interest in suberidiaay income on the Consolidated financiai statement Calculate the total non-controlling interest of follows: Particulars Amount (in & Opening balence fù0%.x886,020) 34,408 Add: Pncome allocation 15,388 Less : dividends paid (10%. X$ 15,000) 2,000 Total non-controlling interest 47,796

company B will be report $47,796 ) as the amount for the amount for total non-controlling intert on the consolidated financial statement calculate the balance of machine as follows. particulay Amount (and) Opening balance 17,980 Add: excess allocation 56,500 less! Depreciation 5,650 closing balance 68,130 company Bevill be report 368,130] aj the amount for the net machine balance on the consolidate financial statement Calculate the amount for the process trade secast of follows : Paraticulary Amount (ing) . Book value 19,900 less: Depreciation 2,580 I proces trade secret. 16,620 Company B will be report & 16,620 oy the amount for the procery trade secaet on the consolidated financial statement