On January 1 2012 QuickPort Company acquired 90

percent of #8102
On January 1, 2012, 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, Net-Speed 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 $60,000 excess of
NetSpeed's fair value over book value to a database with a 5-year remaining life.During the next
two years, NetSpeed reported the following:______________________Income
____________Dividends2012...........................$ 80,000
..................$8,0002013............................115,000 ....................8,000On July 1, 2012, 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, 2013.b. Prepare the worksheet
adjustments for the December 31, 2013, consolidation of QuickPort and NetSpeed.View
Solution:
On January 1 2012 QuickPort Company acquired 90 percent of

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