Problem
On January 1 2021, Mrs. Potts paid $900,000 and acquired 90% of Chip which had a net book value of $425,000 on this date.
Mrs. Potts prepares the acquisition fair value allocation and determines the fair value differences for specifically identified assets and liabilities totals $450,000, which will amortize over 10 years at the rate of $45,000 per year..
For the year ended December 31, 2021, Mrs. Potts paid dividends of $50,000.
For the year ended December 31, 2021, Chip had net income of $350,000 and paid dividends of $15,000.
Question I
The implied fair value of Chip at the date of acquisition is.
Question II
The amount recorded by Mrs. Potts in the 2021 equity method entry to record its earnings in Chip is.
Question III
The amount reported in Mrs. Potts 2021 consolidated income statement for the line Noncontrolling interest in net income is.
Question IV
The amount reported in Mrs. Potts 2021 consolidated financial statements as Dividends is.
Question V
The amount reported in Mrs. Potts 2021 consolidated financial statements as Goodwill is.