Can you explain step by steps those answers! Thank you
Wally Corporation acquired 70 percent of the common shares and 60 percent of the preferred shares of Safety Corporation at underlying book value on January 1, 20X6. At that date, the fair value of the noncontrolling interest in Safetyâs common stock was equal to 30 percent of the book value of its common stock. Safetyâs balance sheet at the time of acquisition contained the following balances:
Assets $700,000 Liabilities $110,000
Preferred Stock 100,000
Common Stock 200,000
Retained Earnings 290,000
Total Assets $700,000 Total Liabilities and Equities $700,000
The preferred shares are cumulative and have an 8 percent annual dividend rate and are three years in arrears on January 1, 20X6. All of the $10 par value preferred shares are callable at $12 per share. During 20X6, Safety reported net income of $80,000 and paid no dividends.
11. Based on the preceding information, what will be the amount of income to be assigned to the noncontrolling interest in the 20X6 consolidated income statement?
Answer is D. $24,800
12. Based on the preceding information, the amount assigned to the noncontrolling stockholdersâ share of preferred stock interest in the preparation of a consolidated balance sheet on January 1, 20X6 is
Answer is A. $57,600
13. Based on the preceding information, what is the portion of Safetyâs retained earnings assignable to its preferred shareholders on January 1, 20X6?
Answer is B. $44,000
14. Based on the information provided, what is the book value of the common stock on January 1, 20X6?
Answer is C. $446,000
15. Based on the information provided, what amount will be reported as the noncontrolling interest in the consolidated balance sheet on January 1, 20X6?
Answer is B. $191,400
Can you explain step by steps those answers! Thank you
Wally Corporation acquired 70 percent of the common shares and 60 percent of the preferred shares of Safety Corporation at underlying book value on January 1, 20X6. At that date, the fair value of the noncontrolling interest in Safetyâs common stock was equal to 30 percent of the book value of its common stock. Safetyâs balance sheet at the time of acquisition contained the following balances:
Assets $700,000 Liabilities $110,000
Preferred Stock 100,000
Common Stock 200,000
Retained Earnings 290,000
Total Assets $700,000 Total Liabilities and Equities $700,000
The preferred shares are cumulative and have an 8 percent annual dividend rate and are three years in arrears on January 1, 20X6. All of the $10 par value preferred shares are callable at $12 per share. During 20X6, Safety reported net income of $80,000 and paid no dividends.
11. Based on the preceding information, what will be the amount of income to be assigned to the noncontrolling interest in the 20X6 consolidated income statement?
Answer is D. $24,800
12. Based on the preceding information, the amount assigned to the noncontrolling stockholdersâ share of preferred stock interest in the preparation of a consolidated balance sheet on January 1, 20X6 is
Answer is A. $57,600
13. Based on the preceding information, what is the portion of Safetyâs retained earnings assignable to its preferred shareholders on January 1, 20X6?
Answer is B. $44,000
14. Based on the information provided, what is the book value of the common stock on January 1, 20X6?
Answer is C. $446,000
15. Based on the information provided, what amount will be reported as the noncontrolling interest in the consolidated balance sheet on January 1, 20X6?
Answer is B. $191,400
Related questions
| P11-2 Preparing the Stockholders Equity Section of the Balance Sheet LO11-3, 11-7 | |||
| Witt Corporation received its charter during January 2014. The charter authorized the following capital stock: | |||
| Preferred stock: 10 percent, par $10, authorized 21,000 shares | |||
| Common stock: par $8, authorized 50,000 shares. | |||
| During 2014, the following transactions occurred in the order given: | |||
| a. | Issued a total of 40,000 shares of the common stock to the four organizers at $12 per share. | ||
| b. | Sold 5,500 shares of the preferred stock at $16 per share. | ||
| c. | Sold 3,000 shares of the common stock at $15 per share and 1,000 shares of the preferred stock at $26. | ||
| d. | Net income for the year was $96,000. | ||
| Required: | |||
| Prepare the Stockholdersâ Equity section of the balance sheet at December 31, 2014. | |||
| Possible input areas are shaded. | |||
| WITT CORPORATION | |||
| Balance Sheet (Partial) | |||
| At December 31, 2014 | |||
| Stockholdersâ equity: | |||
| Contributed capital: | |||
| Total contributed capital | 639,000 | ||
| Total stockholdersâ equity | |||
