On January 1, 2022, Paulson Corporation purchased 65% of the outstanding common stock of Sun Company, which became a subsidiary of Paulson. No goodwill was reported on this acquisition. Differences between book value and fair value of the net identifiable assets of Sun Company on January 1, 2022, were limited to the following: Book value $ 19,000 Inventories (FIFO) Building (net) [remaining life: 5 years; straight-line depreciation; no salvage value] | 45,000 40,000 Sun's cost of goods sold was $38,000 in 2022. Sun reported an income of 20,000 in 2023. The noncontrolling interest in net income for the year ended December 31, 2023 (second year after business combination) was a. $7,350 b. $7,175 C. $6,825 d. $6,650 Fair value $ 18,500

On January 1, 2022, Paulson Corporation purchased 65% of the outstanding common stock of Sun Company, which became a subsidiary of Paulson. No goodwill was reported on this acquisition. Differences between book value and fair value of the net identifiable assets of Sun Company on January 1, 2022, were limited to the following: Book value $ 19,000 Inventories (FIFO) Building (net) [remaining life: 5 years; straight-line depreciation; no salvage value] | 45,000 40,000 Sun's cost of goods sold was $38,000 in 2022. Sun reported an income of 20,000 in 2023. The noncontrolling interest in net income for the year ended December 31, 2023 (second year after business combination) was a. $7,350 b. $7,175 C. $6,825 d. $6,650 Fair value $ 18,500

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, 2022, Paulson Corporation purchased 65% of the outstanding common stock of
Sun Company, which became a subsidiary of Paulson. No goodwill was reported on this
acquisition. Differences between book value and fair value of the net identifiable assets of Sun
Company on January 1, 2022, were limited to the following:
Book value
$ 19,000
Inventories (FIFO)
Building (net) [remaining life: 5 years; straight-line
depreciation; no salvage value] | 45,000
40,000
Sun's cost of goods sold was $38,000 in 2022. Sun reported an income of 20,000 in 2023. The
noncontrolling interest in net income for the year ended December 31, 2023 (second year after
business combination) was
a. $7,350
b. $7,175
C. $6,825
d. $6,650
Fair value
$ 18,500

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