On January 1, Johns, Inc., acquires 60 percent of the outstanding stock of Arnie
ID: 2427669 • Letter: O
Question
On January 1, Johns, Inc., acquires 60 percent of the outstanding stock of Arnie for $61,680. Arnie Co. has one recorded asset, a specialized production machine with a book value of $18,200 and no liabilities. The fair value of the machine is $92,200, 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. Arnie’s total acquisition date fair value is $102,800.
Determine the amounts that Johns should report in its year-end consolidated financial statements for noncontrolling interest in subsidiary income, noncontrolling interest, Arnie’s machine (net of accumulated depreciation), and the process trade secret.
Find A, B, C and D
On January 1, Johns, Inc., acquires 60 percent of the outstanding stock of Arnie for $61,680. Arnie Co. has one recorded asset, a specialized production machine with a book value of $18,200 and no liabilities. The fair value of the machine is $92,200, 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. Arnie’s total acquisition date fair value is $102,800.
Explanation / Answer
A. Noncontrolling interest in subsidaryy income
40% of Annie : (32100-5000)*.4 = $10840
B. total non controlling interest
(32100-5000+37100)*.4 = $25680
C. Calvin's machine
92200*.9*.4 = $33192