Reference no: EM131223426
On January 1, 2012, Uncle company purchased 80 percent of nephew Company's capital stock for $548,000 in cash and other assets. Nephew had a book value of $635,000 and the 20 percent noncontrolling interest fair value was $137,000 on that date On January 1, 2011, Nephew had acquired 30 percent of Uncle for $341,500. Uncle's apprppriately adjusted book value as of that date was $1,105,000.
Separate operating income figures (not including investment income) for these two companies follow. In addition, Uncle declares and pays $30,000 in dividends to shareholders each year and Nephew distributes $4,000 annually. Any excess fair-value allocations are amortized oner a 10 year period.
Uncle Company Nephew Company
Year
2012 $166,000 $ 34,200
2013 178,000 52,000
2014 192,000 61,600
a. Assume that Uncle applies the equity method to account for this investment in Nephew. What is the subsidiary's income recognized by Uncle in 2014?
Subsidiary income recognized
b. What is the noncontrolling interest's share of 2014 consolidated net income?
Noncontrolling interest's share of income.
What would be the likely consequences for inflation
: If the central bank bases its policy decisions on the consensus forecast, - what would be the likely consequences for inflation assuming it maintains its existing inflation target?
|
Which is incorporated in the state of alpha
: You are the 100% owner of X Corporation, which is incorporated in the state of Alpha and has its principal place of business there. Your company has 5 employees, including you, and does computer consulting services for small businesses. You do all of..
|
Which page that first appears once you logged into grantham
: Start each search from the GLife home page within Grantham's website, which is the page that first appears once you've logged into Grantham, and then tell me exactly which items you clicked on and where they were located until you got to your fina..
|
Would you anticipate the bank lending channel
: In the wake of the financial crisis of 2007-2009, would you anticipate the bank lending channel becoming more or less important in the United States in the near future?
|
Subsidiary income recognized
: On January 1, 2012, Uncle company purchased 80 percent of nephew Company's capital stock for $548,000 in cash and other assets. Assume that Uncle applies the equity method to account for this investment in Nephew. What is the subsidiary's income reco..
|
The balance sheet channel of monetary policy
: Do you think the balance-sheet channel of monetary policy would be stronger or weaker if: - Firms' balance sheets in general are very healthy?
|
The company engages in complex sales agreements
: In every audit engagement, the auditors should identify fraud risks that may require an audit response. Described below is a circumstance or factor that may create an increased risk of material misstatement of financial statements due to fraud. The c..
|
Reflect the asset price channel of monetary policy
: Consider a situation where central bank officials repeatedly express concern that output exceeds potential output, implying that the economy is overheating.
|
Assess managing diversity in the workplace
: You have been tasked to communicate to the VP of Human Resources about the need to prepare current staff for a more diverse workforce as a result of opening a new office in Miami, FL. This geographical area is known for its cultural, religious, an..
|