On January 1, BigCo, Inc., acquires 60 percent of the outstanding stock of
LittleCo for $39,024. LittleCo Co. has one recorded asset, a specialized
production machine with a book value of $10,400 and no liabilities. The fair
value of the machine is $51,400, and the remaining useful life is estimated to
be 10 years. Any remaining excess fair value is attributable to an unrecorded
process trade secret with an estimated future life of 4 years. LittleCoâ€™s total
acquisition date fair value is $65,040.
At the end of the year, LittleCo reports the following in its financial
Revenues $ 65,250 Machine $ 9,360 Common stock $ 10,000
Expenses 29,700 Other assets 31,190 Retained earnings 30,550
Net Income $35,550 Total assets $ 40,500 Total equity $ 40,550
Determine the amounts that BigCo should report in its year-end consolidated
financial statements for noncontrolling interest in subsidiary income, total
noncontrolling interest, LittleCoâ€™s machine (net of accumulated depreciation),
and the process trade secret. Report all amounts as positive values. Show your
work for possible partial credit.
Item (5 points each) Value Show your work for possible partial credit!
Noncontrolling interest in subsidiary income
Total noncontrolling interest
LittleCo’s machine (net accumulated depreciation)
Process trade secret