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Problem 5.32(Algo)(LO 5.2,5.3,5.4,5.5) On January 1,2020, Mcllroy, Inc., acquired a 60 percent Interest...

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Accounting

Problem 5.32(Algo)(LO 5.2,5.3,5.4,5.5)
On January 1,2020, Mcllroy, Inc., acquired a 60 percent Interest in the common stock of Stinson, Inc., for $384,600. Stinson's book value on that date consisted of common stock of $100,000 and retained earnings of $227,300. Also, the acquisition-date falr value of the 40 percent noncontrolling Interest was $256,400. The subsidlary held patents (with a 10-year remalning life) that were undervalued Within the company's accounting records by $77,800 and an unrecorded customer list (15-year remaining life) assessed at a $53,700 falr value. Any remaining excess acqulsition-date falr value was assigned to goodwill. Since acquisition, Mcllroy has applied the equity method to Its Investment in Stinson account and no goodwill Impalrment has occurred. At year-end, there are no Intra-entity payables or recelvables.
Intra-entity Inventory sales between the two companles have been made as follows:
\table[[Year,Cost to Mcilroy,Transfer Price,Ending Balance],[to Stinson,(at transfer price),,],[2020,$126,900,$158,625,$52,875
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