On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $330,000 when K-Tech's book value was $430,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $220,000. At the acquisition date, K-Tech's trademark (20-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (10-year remaining life) was undervalued by $40,000. In 2020, K-Tech reports $20,000 net income and declares no dividends. At the end of 2021, the two companies report the following figures (stockholders' equity accounts have been omitted): Current assets Trademarks Patented technology Liabilities Revenues Expenses Investment income Multiple Choice $540,000. Note: Parentheses indicate a credit balance. $532,000. French Company Carrying Amounts O $535,200. $ 640,000 280,000 430,000 (410,000) (920,000) 480,000 Not given O $440,000. K-Tech Company Carrying Amounts $ 320,000 220,000 170,000 What is the 2021 consolidated net income before allocation to the controlling and noncontrolling interests? (140,000) (420,000) 320,000 K-Tech Company Fair Values $ 340,000 300,000 210,000 (140,000)

On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $330,000 when K-Tech's book value was $430,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $220,000. At the acquisition date, K-Tech's trademark (20-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (10-year remaining life) was undervalued by $40,000. In 2020, K-Tech reports $20,000 net income and declares no dividends. At the end of 2021, the two companies report the following figures (stockholders' equity accounts have been omitted): Current assets Trademarks Patented technology Liabilities Revenues Expenses Investment income Multiple Choice $540,000. Note: Parentheses indicate a credit balance. $532,000. French Company Carrying Amounts O $535,200. $ 640,000 280,000 430,000 (410,000) (920,000) 480,000 Not given O $440,000. K-Tech Company Carrying Amounts $ 320,000 220,000 170,000 What is the 2021 consolidated net income before allocation to the controlling and noncontrolling interests? (140,000) (420,000) 320,000 K-Tech Company Fair Values $ 340,000 300,000 210,000 (140,000)

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter8: Property Transactions: Capital Gains And Losses, Section 1231 And Recapture Provisions

Section: Chapter Questions

Problem 38P

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On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $300,000 when K-Tech's book value was $400,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $200,000. At the acquisition date, K-Tech's trademark (10-year remaining life) was undervalued in its financial records by $60,000. Also, patented technology (5-year remaining life) was undervalued by $40,000. In 2020, K-Tech reports $30,000 net income and declares no dividends. At the end of 2021, the two companies report the following figures (stockholders' equity accounts have been omitted): К-Теch Company Fair Values French Company Carrying Amounts К-Тech Company Carrying Amounts Current $ 620,000 $ 300,000 $ 320,000 assets Trademarks Patented 260,000 200,000 280,000 410,000 150,000 190,000 technology Liabilities Revenues Expenses Investment income (390,000) (900,000) 500,000 (120,000) (400,000) 300,000 (120,000) Not given Note: Parentheses indicate a credit balance. Vhat…
On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $306,000 when K-Tech’s book value was $406,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $204,000. At the acquisition date, K-Tech's trademark (10-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (5-year remaining life) was undervalued by $24,000. In 2020, K-Tech reports $28,000 net income and declares no dividends. At the end of 2021, the two companies report the following figures (stockholders’ equity accounts have been omitted): French CompanyCarrying Amounts K-Tech CompanyCarrying Amounts K-Tech CompanyFair Values Current assets $ 624,000 $ 304,000 $ 324,000 Trademarks 264,000 204,000 284,000 Patented technology 414,000 154,000 178,000 Liabilities (394,000 ) (124,000 ) (124,000 ) Revenues (904,000 ) (404,000 )…
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Required information [The following information applies to the questions displayed below.] On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $306,000 when K-Tech's book value was $406,000. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $204,000. At the acquisition date, K-Tech's trademark (10-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (5-year remaining life) was undervalued by $24,000. In 2020, K-Tech reports $24,000 net income and declares no dividends. At the end of 2021, the two companies report the following figures (stockholders' equity accounts have been omitted): French Company K-Tech Company Carrying Carrying K-Tech Company Amounts Amounts Fair Values 622,000 262,000 412,000 (392,000) (902,000) 302,000 202,000 152,000 (122,000) (402,000) 302,000 322,000 282,000 176,000 (122,000) Current assets Trademarks Patented technology Liabilities Revenues Expenses…
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