QUESTION 7 P acquired 80% of the common stock of S on October 1, 20X6. On the date of acquisition, the book value of S was equal to the fair value of S . S reported net income of $180,000 for the year ended 12/31/20X6. Net income earned from Jan. 1 through September 30 was $100,000. • Net income earned from October 1 through December 31 was $80,000. • P reported net income of $305,000 (NOT including any income from the investment in S) for the year ended 12/31/20X6. This content is copyrighted On the consolidated income statement, what will be reported as net income attributable to the noncontrolling interest? A. $77,000 B. $20,000 OC. $36,000 D. $16,000 E. $61,000

QUESTION 7 P acquired 80% of the common stock of S on October 1, 20X6. On the date of acquisition, the book value of S was equal to the fair value of S . S reported net income of $180,000 for the year ended 12/31/20X6. Net income earned from Jan. 1 through September 30 was $100,000. • Net income earned from October 1 through December 31 was $80,000. • P reported net income of $305,000 (NOT including any income from the investment in S) for the year ended 12/31/20X6. This content is copyrighted On the consolidated income statement, what will be reported as net income attributable to the noncontrolling interest? A. $77,000 B. $20,000 OC. $36,000 D. $16,000 E. $61,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 24E

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QUESTION 24 On January 3, 20X9, Pleat Company acquired 80 percent of Stitch Corporation's common stock for $344,000 in cash. At the acquisition date, the book values and fair values of Stitch's assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 20 percent of the total book value of Stitch. The stockholders' equity accounts of the two companies at the acquisition date are: Pleat Stitch Common Stock ($5 par value) $ 500,000 $ 200,000 Additional Paid-In Capital 300,000 80,000 Retained Earnings 350,000 150,000 Total Stockholders' Equity $ 1,150,000 $ 430,000 Noncontrolling interest was assigned income of $11,000 in Pleat's consolidated income statement for 20X9.Based on the preceding information, what will be the amount of net income reported by Stitch Corporation in 20X9? $44,000 $66,000 $36,000 $55,000
Question 32 On July 1, 20X8, Pair Logic Corporation acquires 75 percent of Systems Inc. common stock for its underlying book value. At the time of acquisition, the fair value of the noncontrolling interest is equal to its proportionate share of book value of Systems. On January 1, 20X8 Systems reported common stock of $100,000 and retained earnings of $130,000. For the year 20X8, Systems reports the following items: Before Combination (January 1 to June 30) After Combination (July 1 to December 31) Sales $ 150,000 160,000 Cost of Goods Sold 90,000 93,000 Depreciation Expense 20,000 20,000 Other Expenses 15,000 17,000 Net Income 25,000 30,000 Dividends 15,000 18,000 Based on the preceding information, what is the fair value of the noncontrolling interest at the time of acquisition? $47,813 $57,500 $60,000 $45,000
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Question 17 Pain Corporation holds 90 percent of Soothing Company's common shares but none of its preferred shares. On the date of acquisition, the fair value of the noncontrolling interest was equal to 10 percent of the book value of Soothing Company. Summary balance sheets for the companies on December 31, 20X8, are as follows: Pain Corporation Soothing Company Cash and Receivables $ 80,000 $ 70,000 Inventory 40,000 30,000 Buildings and Equipment (net) 160,000 150,000 Investment in Soothing Company 135,000 0 Total Assets $ 415,000 $ 250,000 Accounts Payable 50,000 $ 25,000 Preferred Stock ($10 par value) 50,000 75,000 Common Stock ($5 par value) 100,000 50,000 Retained Earnings 215,000 100,000 Total Liabilities and Owners’ Equity $ 415,000 $ 250,000 Pain's preferred pays a 8 percent annual dividend, and Soothing's…
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