On January 1, 2015, Pomegranate Company acquired 80% of the voting stock of Starfruit Company for $47,100,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was 16,900,000. Starfruit's book value was $12,000,000 at the date of acquisition, Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10-year life, straight line) was overvalued by $13,000,000, Starfruit Company had previously unreported intangible assets, with a market value of $16,000,000 and 5-year life, straight-line. which were capitalized following GAAP If Pomegranate follows IFRS and uses the alternative method of valuing the noncontrolling interest, at the date of acquisition the noncontrolling interest in Starfruit appears in the equity section of the consolidated balance sheet in the amount of O$7,800,000 O$6,300,000 O$3,000,000 O$1,300,000

On January 1, 2015, Pomegranate Company acquired 80% of the voting stock of Starfruit Company for $47,100,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was 16,900,000. Starfruit's book value was $12,000,000 at the date of acquisition, Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10-year life, straight line) was overvalued by $13,000,000, Starfruit Company had previously unreported intangible assets, with a market value of $16,000,000 and 5-year life, straight-line. which were capitalized following GAAP If Pomegranate follows IFRS and uses the alternative method of valuing the noncontrolling interest, at the date of acquisition the noncontrolling interest in Starfruit appears in the equity section of the consolidated balance sheet in the amount of O$7,800,000 O$6,300,000 O$3,000,000 O$1,300,000

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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