Protrade Corporation Acquired 80 Percent Of The Ou
Protrade Corporation acquired 80 percent of the ou
Exam (elaborations)
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on Jan
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Protrade Corporation acquired 80 percent of the ou
Institution
Protrade Corporation Acquired 80 Percent Of The Ou
Protrade Corporation acquirProtrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on Jan
ed 80 percent of the outstanding voting stock of Seacraft Company on Jan
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company...
Protrade Corporation acquired 80 percent of the outstanding voting stock of Seacraft Company on
January 1, 2014, for $612,000 in cash and other consideration. At the acquisition date, Protrade
assessed Seacraft’s identifiable assets and liabilities at a collective net fair value of $765,000 and the fair
value of the 20 percent noncontrolling interest was $153,000. No excess fair value over book value
amortization accompanied the acquisition.
The following selected account balances are from the individual financial records of these two
companies as of December 31, 2015:
Protrade Seacraft
Sales $ 880,000 $600,000
Cost of goods sold 410,000 317,000
Operating expenses 174,000 129,000
Retained earnings, 1/1/15 980,000 420,000
Inventory 370,000 144,000
Buildings (net) 382,000 181,000
Not
Investment income 0
given
Each of the following problems is an independent situation:
a. Assume that Protrade sells Seacraft inventory at a markup equal to 60 percent of cost. Intra-entity transfers
were $114,000 in 2014 and $134,000 in 2015. Of this inventory, Seacraft retained and then sold $52,000 of the
2014 transfers in 2015 and held $66,000 of the 2015 transfers until 2016.
Determine balances for the following items that would appear on consolidated financial statements
for 2015:
b. Assume that Seacraft sells inventory to Protrade at a markup equal to 60 percent of cost. Intra-entity transfers
were $74,000 in 2014 and $104,000 in 2015. Of this inventory, $45,000 of the 2014 transfers were retained and
then sold by Protrade in 2015, whereas $59,000 of the 2015 transfers were held until 2016.
Determine balances for the following items that would appear on consolidated financial statements
for 2015:
c. Protrade sells Seacraft a building on January 1, 2014, for $128,000, although its book value was only
$74,000 on this date. The building had a five-year remaining life and was to be depreciated using the
straight-line method with no salvage value.
Determine balances for the following items that would appear on consolidated financial statements
for 2015:
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