On January 1, 20X8, PERRY Company acquired 70 percent of WILLEL Company\'s commo
ID: 2561235 • Letter: O
Question
On January 1, 20X8, PERRY Company acquired 70 percent of WILLEL Company's common stock for $245,000 cash. At that date, WILLEL reported common stock outstanding of $200,000 and retained earnings of $100,000, and the fair value of the noncontrolling interest was $105,000. The book values and fair values of WILLEL's assets and liabilities were equal, except for other intangible assets which had a fair value $50,000 greater than book value and an 8-year remaining life. WILLEL reported the following data for 20x8 and 20X9: WILLEL Corporation Dividends Year Net Income Comprehensive Income Paid 20x8 20x9 $25,000 35,000 $30,000 45,000 $5,000 10,000 PERRY reported net income of $100,000 and paid dividends of $30,000 for both the years REQUIRED: (Show All Computations) A. What is the amount of OCI reported on the books of WILLEL for a. X8 B. What is the amount of OCI reported on the book of PERRY Company for: a. X8 C. What is the amount of OCI Reported on the consolidated Balance sheet of PERRY for: a. X8Explanation / Answer
Purchase 70% 2,45,000 Common stock 2,00,000 Retained Earning 1,00,000 Fair value higher than book value of Intangible 50,000 Total 3,50,000 Perry's Interest 70% 2,45,000 Minority Interest 30% 1,05,000 Intangible asset to be written of in 8 years equally Total Value Perry's Share Other Share 20X8 6250 4,375 1,875 20X9 6250 4,375 1,875 Amount of OCI reported on the the books of WILLEL 20X8 20X9 Other comprehensive income 5,000 10,000 Amount of OCI reported on the the books of Perry 20X8 20X9 Other comprehensive Loss (4,375) (4,375) Amount of OCI reported on the the books of Consolidated company 20X8 20X9 Other comprehensive Loss (6,250) (6,250)