It is now December the reporting yearend for both IBM and Red Hat. IBM uses the complete equity method to account for its investment in Red Hat on its own books. Assume the acquisition took place July
Also assume the following information in millions:
Information concerning revaluations is as follows:
Revaluation of current assets relate to inventories sold in
The revalued property, plant and equipment has a year life, straightline.
The revaluation of intangible assets consists of $ for client relationships with a year life, $ for completed technology with a year life, and $ for trademarks, with a year life, all straightline.
No impairment is reported for goodwill.
Revaluation of current liabilities relates to liabilities settled in
Revaluation of noncurrent liabilities relates to liabilities settled prior to
Red Hat's retained earnings at January is $; its accumulated other comprehensive loss at January is $ There are no changes in Red Hat's capital stock or treasury stock. For Red Hat reports
income of $ and other comprehensive losses of $
For the questions below, show your answers in millions, and round to the nearest million.
Note: Do not round intermediate calculations only round final answers.
Required
a Calculate the balance in the investment account, reported on IBM's books on July and on December
July $
December $Consolidation Eliminating Entries, Several Years Since Acquisition future years. Red Hat's balance sheet at the date of acquisition, plus fair value information, are as follows in millions:
tablein millionstableFairBook ValueCurrent assets,$$Property plant and equipment,Intangible assets,GoodwillTotal assets,$Current liabilities,$$Noncurrent liabilities,Total liabilities,Capital stock,Retained earnings,Treasury stock,Accumulated other comprehensive loss,Total equity,Total liabilities and equity,$
