What would be the non-controlling interest amount appearing on Kho's consolidated statement of financial position at the end of 2018?
Kho Inc. purchased 90% of the voting shares of Lan Inc. for $600,000 on January 1, 2017. On that date, Lan's commons shares and retained earnings were valued at $200,000 and $250,000 respectively. Unless otherwise stated, assume that Kho uses the cost method to account for its investment in Lan Inc.
Lan's fair values approximated its carrying values with the following exceptions:
Lan's trademark had a fair value which was $50,000 higher than its carrying value.
Lan's bonds payable had a fair value which was $20,000 higher than their carrying value.
The trademark had a useful life of exactly ten years remaining from the date of acquisition. The bonds payable mature on January 1, 2027. Both companies use straight line amortization exclusively.
The financial statements of both companies for the year ended December 31, 2018 are shown below:
Income Statements
Retained Earnings Statements
Other Information:
A goodwill impairment test conducted during August 2018 revealed that the Lan's Goodwill amount on the date of acquisition had been impaired by $10,000.
During 2017, Kho sold $50,000 worth of inventory to Lan, half of which was sold to outsiders during the year.
During 2018, Kho sold inventory to Lan for $90,000. Two-thirds of this inventory was resold by Lan to outside parties.
During 2017, Lan sold $30,000 worth of inventory to Kho, 80% of which was sold to outsiders during the year.
During 2018, Lan sold inventory to Kho for $40,000. 75% of this inventory was resold by Kho to outside parties.
All intercompany sales as well as sales to outsiders are priced 25% above cost. The effective tax rate for both companies is 20%.
A) $55,840. B) $29,936. C) $57,400. D) $74,907.
D) $74,907.
You might also like to view...
In the action section of the AIDA plan, what should be included in an application letter?
A) Salary range B) References C) Personal characteristics that apply to the targeted position D) A request for an interview E) Date you will follow up for an interview
The equal dignity rule requires the parties to a transaction to treat each other with equal dignity.
Answer the following statement true (T) or false (F)
Which of the following is among the things that a plaintiff must show in order to establish a prima facie case of disparate treatment in a pretext case?
a. proof that the employer intended to discriminate b. proof that the employer's stated motive is not credible c. statistical evidence of discriminatory effects d. all of the above e. none of the above
Key element(s) of the tort of intentional interference with contractual relations is (are):
a. a contract between the injured party and the defendant who interfered b. the defendant intentionally interfered with a contract between the injured party and another party c. malice by the defendant must be shown d. a warranty of performance in a contract is breached e. all of the other specific choices