Business, 07.10.2021 22:50 muhammed95

On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSpeed, Inc., for $810,000 in cash and stock options. At the acquisition date, NetSpeed had
common stock of $800,000 and Retained Earnings of $40,000. The acquisition-date fair value of
the 10 percent noncontrolling interest was $90,000. QuickPort attributed the $60,000 excess of
NetSpeed's fair value over book value to a database with a five-year remaining life.
During the next two years, NetSpeed reported the following:
Net Income
Dividends Declared
2020
2021
$ 80,000
115,000
$8,000
8,000
On July 1, 2020, QuickPort sold communication equipment to NetSpeed for $42,000. The
equipment originally cost $48,000 and had accumulated depreciation of $9,000 and an estimated
remaining life of three years at the date of the intra-entity transfer.
a. Compute the equity method balance in QuickPort's Investment in NetSpeed, Inc., account as of
December 31, 2021.
b. Prepare the worksheet adjustments for the December 31, 2021, consolidation of QuickPort and
NetSpeed.

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On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of NetSp...

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