Required: Select the correct answer for each of the following questions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Ram.5
![Required Information
[The following information applies to the questions displayed below.]
Apple Corporation acquires 80 percent of Berry Corporation's common shares on January 1, 20X2. On
January 2, 20X2, Berry acquires 60 percent of Coco Corporation's common stock. Information on company
book values on the date of purchase and operating results for 20X2 is as follows:
Company
Apple Corporation
Berry Corporation
Coco Corporation
The fair values of the noncontrolling interests of Berry and Coco at the dates of acquisition were $60,000 and
$80,000, respectively.
Required:
Select the correct answer for each of the following questions.
Multiple Choice
$2,400.
Book Value
$ 800,000
300,000
200,000
5. Assume that Berry pays $150,000, rather than $120,000, to purchase 60 percent of Coco's common stock, and the fair
value of the noncontrolling interest is $100,000 at the date of acquisition. If the differential is amortized over 10 years, the
effect on 20x2 income assigned to the controlling shareholders will be a decrease of:
$3,000.
Purchase Price
$ 240,000
120,000
$5,000.
$0.
29X2 Operating Income
$ 100,000
80,000
50,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F46924923-9b5d-45ba-84b0-ebcd9a2f5d66%2F53446731-709b-401f-96b9-89033d97f64c%2F6dhy5zj_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
[The following information applies to the questions displayed below.]
Apple Corporation acquires 80 percent of Berry Corporation's common shares on January 1, 20X2. On
January 2, 20X2, Berry acquires 60 percent of Coco Corporation's common stock. Information on company
book values on the date of purchase and operating results for 20X2 is as follows:
Company
Apple Corporation
Berry Corporation
Coco Corporation
The fair values of the noncontrolling interests of Berry and Coco at the dates of acquisition were $60,000 and
$80,000, respectively.
Required:
Select the correct answer for each of the following questions.
Multiple Choice
$2,400.
Book Value
$ 800,000
300,000
200,000
5. Assume that Berry pays $150,000, rather than $120,000, to purchase 60 percent of Coco's common stock, and the fair
value of the noncontrolling interest is $100,000 at the date of acquisition. If the differential is amortized over 10 years, the
effect on 20x2 income assigned to the controlling shareholders will be a decrease of:
$3,000.
Purchase Price
$ 240,000
120,000
$5,000.
$0.
29X2 Operating Income
$ 100,000
80,000
50,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education