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On 1/1/22 Big Co acquired 60% of Little Co voting stock for $300,000 value of the non-controlling interest was $200,000 on that date. Littl value on that date was $350,000. Little had the following misvalued/unreported assets and liabilities: Land: Undervalued by $ Inventory, FIFO basis: Undervalued by $12,000 Bonds payable, 5 yea Undervalued by $10,000 In-process R&D, not reported on Little's bal

On 1/1/22 Big Co acquired 60% of Little Co voting stock for $300,000 value of the non-controlling interest was $200,000 on that date. Littl value on that date was $350,000. Little had the following misvalued/unreported assets and liabilities: Land: Undervalued by $ Inventory, FIFO basis: Undervalued by $12,000 Bonds payable, 5 yea Undervalued by $10,000 In-process R&D, not reported on Little's bal

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On 1/1/22 Big Co acquired 60% of Little Co voting stock for $300,000; the fair value of the non-controlling interest was $200,000 on that date. Little's book value on that date was $350,000. Little had the following misvalued/unreported assets and liabilities: Land: Undervalued by $5,000 Inventory, FIFO basis: Undervalued by $12,000 Bonds payable, 5 year life: Undervalued by $10,000 In-process R&D, not reported on Little's balance sheet, 2 year life: Worth $8,000 In 2022 Little reported earnings of $50,000 and paid dividends of $10,000 How much Goodwill would be recorded in the consolidation entries? What is the "Income to the NC interest" in 2022?
Transcribed Image Text:On 1/1/22 Big Co acquired 60% of Little Co voting stock for $300,000; the fair value of the non-controlling interest was $200,000 on that date. Little's book value on that date was $350,000. Little had the following misvalued/unreported assets and liabilities: Land: Undervalued by $5,000 Inventory, FIFO basis: Undervalued by $12,000 Bonds payable, 5 year life: Undervalued by $10,000 In-process R&D, not reported on Little's balance sheet, 2 year life: Worth $8,000 In 2022 Little reported earnings of $50,000 and paid dividends of $10,000 How much Goodwill would be recorded in the consolidation entries? What is the "Income to the NC interest" in 2022?
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