On January 1, 2019, Post Corporation acquired 80 percent of Star Company's common stock for $160,000 cash, when the book value of Star Company was $160,000. At the date of the business combination, the book values of Star's net assets and liabilities approximated fair value except for inventory, which had a book value of $40,000 and fair value of $45,000, and equipment, which had a book value of $100,000 and a fair value of $120,000. Additional information: * Star Company uses the FIFO method and all inventory acquired on January 1, 2019 were sold during 2019. * Equipment has a remaining useful life of 10 years, and the straight-line method is used. * Star reported net income of $60,000 and $75,000 for 2019 and 2020 respectively. * Star Company declared and paid dividends of $30,000 in 2019 and $40,000 in 2020. What is the balance of Noncontrolling interest in Net Assets on December 31, 2020? Select one: a. $52,200 b. $53,000 c. $51,200 d. $40,000

On January 1, 2019, Post Corporation acquired 80 percent of Star Company's common stock for $160,000 cash, when the book value of Star Company was $160,000. At the date of the business combination, the book values of Star's net assets and liabilities approximated fair value except for inventory, which had a book value of $40,000 and fair value of $45,000, and equipment, which had a book value of $100,000 and a fair value of $120,000. Additional information: * Star Company uses the FIFO method and all inventory acquired on January 1, 2019 were sold during 2019. * Equipment has a remaining useful life of 10 years, and the straight-line method is used. * Star reported net income of $60,000 and $75,000 for 2019 and 2020 respectively. * Star Company declared and paid dividends of $30,000 in 2019 and $40,000 in 2020. What is the balance of Noncontrolling interest in Net Assets on December 31, 2020? Select one: a. $52,200 b. $53,000 c. $51,200 d. $40,000

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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Question

On January 1, 2019, Post Corporation acquired
80 percent of Star Company's common stock for
$160,000 cash, when the book value of Star
Company was $160,000.
At the date of the business combination, the book
values of Star's net assets and liabilities
approximated fair value except for inventory,
which had a book value of $40,000 and fair value
of $45,000, and equipment, which had a book
value of $100,000 and a fair value of $120,000.
Additional information:
* Star Company uses the FIFO method and all
inventory acquired on January 1, 2019 were sold
during 2019.
Equipment has a remaining useful life of 10
years, and the straight-line method is used.
* Star reported net income of $60,000 and
$75,000 for 2019 and 2020 respectively.
* Star Company declared and paid dividends of
$30,000 in 2019 and $40,000 in 2020.
What is the balance of Noncontrolling interest in
Net Assets on December 31, 2020?
Select one:
a. $52,200
b. $53,000
c. $51,200
d. $40,000

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