Reference no: EM132009570
Question - On January 1, 2013, Telconnect acquires 70 percent of Bandmor for $490,000 cash. The remaining 30 percent of Bandmor's shares continued to trade at a total value of $210,000. The new subsidiary reported common stock of $300,000 on that date, with retained earnings of $180,000. A patent was undervalued in the company's financial records by $30,000. This patent had a 5-year remaining life. Goodwill of $190,000 was recognized and allocated proportionately to the controlling and noncontrolling interests. Bandmor earns net income and declares cash dividends as follows:
Year Net Income Dividends
2013 $ 75,000 $ 39,000
2014 96,000 44,000
2015 110,000 60,000
On December 31, 2015, Telconnect owes $22,000 to Bandmor
a. If Telconnect has applied the initial value method, prepare Entry C for 2015 consolidation?
b. If Telconnect has applied the partial equity method, prepare Entry C for 2015 consolidation?
c. What noncontrolling interest balances will appear in consolidated financial statements for 2015?
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