Pearl acquires 90% of the voting stock of Spruce on January 1, 2020 for $5,000. The fair value of the noncontrolling interest is $550. Spruce's equity is reported at $4,800 at the date of acquisition. Its net assets are reported at amounts approximating fair value, but it has previously unreported identifiable intangible assets (5-year life, straight-line), valued at $1,000. Pearl uses the complete equity method to account for its investment. Spruce reports net income of $300 for 2020. On the 2020 consolidation working paper, what is the credit to noncontrolling interest in eliminating entry (R)? A. B. C. $80 $65 $85 D. $70

Pearl acquires 90% of the voting stock of Spruce on January 1, 2020 for $5,000. The fair value of the noncontrolling interest is $550. Spruce's equity is reported at $4,800 at the date of acquisition. Its net assets are reported at amounts approximating fair value, but it has previously unreported identifiable intangible assets (5-year life, straight-line), valued at $1,000. Pearl uses the complete equity method to account for its investment. Spruce reports net income of $300 for 2020. On the 2020 consolidation working paper, what is the credit to noncontrolling interest in eliminating entry (R)? A. B. C. $80 $65 $85 D. $70

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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