Phantom acquired 70% of the $100,000 equity share capital of Ghost, its only subsidiary, for $200,000 on 1 January 20X9 when the retained earnings of Ghost were $156,000. At 31 December 20X9 retained earnings are as follows. Phantom Ghost $ 275,000 177,000 Phantom considers that goodwill on acquisition is impaired by 50%. Non- controlling interest is measured at fair value, estimated at $82,800. What are group retained earnings at 31 December 20X9? a) $276,300 b) $289,700 c) $280,320 d) $269,200

Phantom acquired 70% of the $100,000 equity share capital of Ghost, its only subsidiary, for $200,000 on 1 January 20X9 when the retained earnings of Ghost were $156,000. At 31 December 20X9 retained earnings are as follows. Phantom Ghost $ 275,000 177,000 Phantom considers that goodwill on acquisition is impaired by 50%. Non- controlling interest is measured at fair value, estimated at $82,800. What are group retained earnings at 31 December 20X9? a) $276,300 b) $289,700 c) $280,320 d) $269,200

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 30E

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Phantom acquired 70% of the $100,000 equity share capital of Ghost, its only subsidiary, for $200,000 on 1 January 20X9 when the retained earnings of Ghost were $156,000. At 31 December 20X9 retained earnings are as follows. $ Phantom 275,000 Ghost 177,000 Phantom considers that goodwill on acquisition is impaired by 50%. Non-controlling interest is measured at fair value, estimated at $82,800. What are group retained earnings at 31 December 20X9?
1. Breakspear Co purchased 600,000 of the voting equity shares of Fleet Co when the value of the non-controlling interest in Fleet Co is £150,000. The following information relates to Fleet at the acquisition date. At acquisition £'000 Share capital, £0.5 ordinary shares Retained earnings Revaluation surplus The goodwill arising on acquisition is £70,000. What was the consideration paid by Breakspear Co for the investment in Fleet Co? 500 150 50 700 a) £420,000 b) £770,000 c) £620,000 d) £570,000 K
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Paste Corporation acquired 70 percent of Stick Company's stock on January 1, 20X9, for $105,000. At that date, the fair value of the noncontrolling interest was equal to 30 percent of the book value of Stick Company. The companies reported the following stockholders’ equity balances immediately after the acquisition: Paste Corporation Stick Company Common Stock $ 120,000 $ 30,000 Additional Paid-in Capital 230,000 80,000 Retained Earnings 290,000 40,000 Total $ 640,000 $ 150,000 Paste and Stick reported 20X9 operating incomes of $90,000 and $35,000 and dividend payments of $30,000 and $10,000, respectively. Required: Compute the amount reported as net income by each company for 20X9, assuming Paste uses equity-method accounting for its investment in Stick. Compute consolidated net income for 20X9.
Paste Corporation acquired 70 percent of Stick Company's stock on January 1, 20X9, for $105,000. At that date, the fair value of the noncontrolling interest was equal to 30 percent of the book value of Stick Company. The companies reported the following stockholders’ equity balances immediately after the acquisition: Paste Corporation Stick Company Common Stock $ 120,000 $ 30,000 Additional Paid-in Capital 230,000 80,000 Retained Earnings 290,000 40,000 Total $ 640,000 $ 150,000 Paste and Stick reported 20X9 operating incomes of $90,000 and $35,000 and dividend payments of $30,000 and $10,000, respectively. Compute the reported balance in retained earnings at December 31, 20X9, for both companies. Compute consolidated retained earnings at December 31, 20X9.