On January 1, 2014, Pinnead Incorporated paid $300,000 for an 80% interest in Shalle Company. At that time, Shalle's total book value was $300,000. Patents were undervalued in the amount of $10,000. Patents had a 5-year remaining useful life, and any remaining excess value was attributed to goodwill. The income statements for the year ended December 31, 2014 of Pinnead and Shalle are summarized below:
Requirements:
1. Calculate the goodwill that will appear in the consolidated balance sheet of Pinnead and Subsidiary at December 31, 2014.
2. Calculate consolidated net income for 2014.
3. Calculate the noncontrolling interest share for 2014.

Question

On January 1, 2014, Pinnead Incorporated paid $300,000 for an 80% interest in Shalle Company. At that time, Shalle's total book value was $300,000. Patents were undervalued in the amount of $10,000. Patents had a 5-year remaining useful life, and any remaining excess value was attributed to goodwill. The income statements for the year ended December 31, 2014 of Pinnead and Shalle are summarized below:
  Requirements:
1. Calculate the goodwill that will appear in the consolidated balance sheet of Pinnead and Subsidiary at December 31, 2014.
2. Calculate consolidated net income for 2014.
3. Calculate the noncontrolling interest share for 2014.

Quizplus · Accepted Answer

The Answer of On January 1, 2014, Pinnead Incorporated paid $300,000 for an 80% interest in Shalle Company. At that time, Shalle's total book value was $300,000. Patents were undervalued in the amount of $10,000. Patents had a 5-year remaining useful life, and any remaining excess value was attributed to goodwill. The income statements for the year ended December 31, 2014 of Pinnead and Shalle are summarized below:
  Requirements:
1. Calculate the goodwill that will appear in the consolidated balance sheet of Pinnead and Subsidiary at December 31, 2014.
2. Calculate consolidated net income for 2014.
3. Calculate the noncontrolling interest share for 2014.

On January 1, 2014, Pinnead Incorporated Paid $300,000 for an 80