Patterson Company Acquired 90% of Starr Corporation on January 1,2014

Essay

Patterson Company acquired 90% of Starr Corporation on January 1,2014 for $2,250,000.Starr had net assets at that time with a fair value of $2,500,000.At the time of the acquisition,Patterson computed the annual excess fair-value amortization to be $20,000,based on the difference between Starr's net book value and net fair value.Assume the fair value exceeds the book value,and $20,000 pertains to the whole company.Separate from any earnings from Starr,Patterson reported net income in 2014 and 2015 of $550,000 and $575,000,respectively.Starr reported the following net income and dividend payments:
Required: Calculate the following:
• Investment in Starr shown on Patterson's ledger at December 31,2014 and 2015.
• Investment in Starr shown on the consolidated statements at December 31,2014 and 2015.
• Consolidated net income for 2014 and 2015.
• Noncontrolling interest balance on Patterson's ledger at December 31,2014 and 2015.
• Noncontrolling interest balance on the consolidated statements at December 31,2014 and 2015.