Purple Corporation acquired 75 percent of Socks Corporations common stock on January 1, 20X8, for...
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Accounting
Purple Corporation acquired 75 percent of Socks Corporations common stock on January 1, 20X8, for $435,000. At that date, Socks reported common stock outstanding of $300,000 and retained earnings of $200,000, and the fair value of the noncontrolling interest was $145,000. The book values and fair values of Socks's assets and liabilities were equal, except for other intangible assets, which had a fair value $80,000 more than book value and a 10-year remaining life. Purple and Socks reported the following data for 20X8 and 20X9:
Socks Corporation
Purple Corporation
Year
Net Income
Comprehensive Income
Dividends Paid
Operating Income
Dividends Paid
20X8
$
40,000
$
50,000
$
15,000
$
120,000
$
70,000
20X9
60,000
65,000
30,000
140,000
70,000
Required: a. Compute consolidated comprehensive income for 20X8 and 20X9. b. Compute comprehensive income attributable to the controlling interest for 20X8 and 20X9. c. Assuming that Purple reported capital stock outstanding of $320,000 and retained earnings of $430,000 at January 1, 20X8, prepare the stockholders equity section of the consolidated balance sheet at December 31, 20X8 and 20X9.
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