Reference no: EM132780086

Question - On June 30th, 2018 Parker, Inc. acquires 80% of Sawyer Company for $800,000. The remaining 20% of Sawyer's outstanding shares continue to trade at a collective value of $200,000. On the acquisition date, Sawyer has the following accounts:

Book Value Fair Value

Current Assets $210,000 $210,000

Land 170,000 250,000

Buildings 300,000 450,000

Patent -0- 120,000

Liabilities (280,000) (280,000)

The buildings have a 10-year life and the patent has a 6-year life. Parker reported Net Income for 2018 of $530,000 (excluding any income from Sawyer), and Sawyer separately reported Net Income of $175,000. Sawyer paid dividends for the year of $60,000. You can assume that Sawyer's Net Income and Dividends were earned and paid ratably throughout the year.

Required - Fair Value Analysis:

a. Consolidated Net Income for the year.

b. Consolidated Net Income allocated to the Noncontrolling Interest.

c. Consolidated Net Income allocated to the Controlling Interest.

d. Balance of the Noncontrolling Interest at the end of the year.

e. Balance of the Patent account at the end of the year.