On January 1, 2023, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Incorporated, for $810,000in cash and stock options. At the acquisition date. NetSpeed had common stock of $800,000 and Retained Earnings of $40,000. Theacquisition-dete fair value of the 10 percent noncontrolling interest was $90.000. QuickPort attributed the $60.000 excess ofNetSpeed's fair value over book value to a database with a five-year remaining lifeDuring the next two years, NetSpeed reported the followingIncome8,000DividendsDeclaredOn July 1, 2023, QuickPort sold communication equipment to NetSpeed for $42.000. The equipment originally cost $48,000 and hadaccumulated depreciation of $9,000 and an estimated remaining life of three years at the date of the intra-entity transferRequired:Compute the equity method balance in QuickPort's Investment in NetSpeed, incorporated, account as of December 31, 2024.b. Prepere the worksheet adjustments for the December 31, 2024, consolidation of QuickPort and NetSpeedCompute the equity method balance in QuickPort's Investment in NetSpeed, Incorporated, account as of December 31, 2024.Investment in NetSpeed, Incorporated, 12/31/241 Prepare entry "TA2 Prepare entry SPrepare entry A4 Prepare entry I5 Prepare entry D6 Prepare entry E7 Prepare entry ED

Investment:It refers to the process of using the currently held excess cash to earn profitable…

Required: a.Compute the equity method balance in QuickPort's Investment in NetSpeed, Incorporated, account as of December 31, 2024 b. Prepere the worksheet adjustments for the December 31, 2024, consolidation of QuickPort and NetSpeed

Required: a.Compute the equity method balance in QuickPort's Investment in NetSpeed, Incorporated, account as of December 31, 2024 b. Prepere the worksheet adjustments for the December 31, 2024, consolidation of QuickPort and NetSpeed

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 8MC

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On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $1,161,000 in cash and stock options. At the acquisition date, NetSpeed had common stock of $1,220,000 and Retained Earnings of $61,000. The acquisition-date fair value of the 10 percent noncontrolling interest was $129,000. QuickPort attributed the $9,000 excess of NetSpeed's fair value over book value to a database with a five-year remaining life. During the next two years, NetSpeed reported the following: Dividends Net Income Declared $ 12,600 18,000 $ 1,800 1,800 2020 2021 On July 1, 2020, QuickPort sold communication equipment to NetSpeed for $15,000. The equipment originally cost $18,500 and had accumulated depreciation of $5,300 and an estimated remaining life of three years at the date of the intra-entity transfer. a. Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2021. b. Prepare the worksheet adjustments…
On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $1,035,000 in cash and stock options. At the acquisition date, NetSpeed had common stock of $1,090,000 and Retained Earnings of $54,500. The acquisition-date fair value of the 10 percent noncontrolling interest was $115,000. QuickPort attributed the $5,500 excess of NetSpeed's fair value over book value to a database with a five-year remaining life. During the next two years, NetSpeed reported the following: Net Income Dividends Declared 2020 $ 7,700 $ 1,100 2021 11,000 1,100 On July 1, 2020, QuickPort sold communication equipment to NetSpeed for $8,500. The equipment originally cost $22,000 and had accumulated depreciation of $15,900 and an estimated remaining life of three years at the date of the intra-entity transfer. Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of December 31, 2021. Prepare the…
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