Ch 05 Notes and Problems.xlsx - On January 1 2019 A purchased 75 percent of the outstanding stock of B for $550 A estimated the value of the

Ch 05 Notes and Problems.xlsx - On January 1 2019 A...

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On January 1, 2019, A purchased 75 percent of the outstanding stock of B for $550. A estimated the value of the non-controlling interest to be $175. B had a $180 balance in their common stock and $320 in retained earnings for total net assets of $500 at the acquisition date. A estimated a building with an estimate useful life of 20 years had was undervalued by $160 and equipment with a five year life was undervalued by $20. The remaining purchase price went to goodwill. Summarized financial data at December 31, 2019 is as follows: A B Current asssets 750 445 Investment in B 550 Buildings 600 200 Equiptment 850 165 Acc Dep (350) (105) Liabilities (880) (165) Common stock (50) (180) revenue (645) (250) expenses 255 190 retained earnings (1,080) (320) J Inv B 45 (60) (45.00) Inv Inc 45 J Inv Inc 9 Inv B 9 9 N Inc attributable to NCI 15 60*0.25 NCI 15 N NCI 3 12*.25 IA NCI 3 S Stock 180 (180) R/e 320 Inv B 375 375 NCI 125 125 A Building 160 Equiptment 20 Goodwill 45 Inv B 175 NCI 50 I Inv Inc 36 36
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Inv B 36
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Controlling Non Controlling Valuation 550 175 Stock (135.00) (45.00) r/e (240.00) (80.00) building 120.00 40 equiptment 15 5 goodwill 160 1
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On January 1, 2017, A purchased 80% of the outstanding stock of B for $450. A determined the value of the non-controlling stock to be $110. On Valuation December 31, 2017 common stock of B was $100 and retained earnings were net assets $290. Included in the purchase was equipment undervalued by $100 with a equiptment ten year life and a customer list with a five year life valued at $50 with the customer list remainder going to goodwill. B’s net income was $110 in 2017 and $130 in
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