Summer Company holds assets with afair value of $125,000 and a bookvalue of $93,000 and liabilities with abook value and fair value of $28,000.Required:Compute the following amounts ifParade Corporation acquires 65percent ownership of Summer:a. What amount did Parade pay for theshares if no goodwill and no gain on abargain purchase are reported?b. What amount did Parade pay for theshares if the fair value of thenoncontrolling interest at acquisition is$45,150 and goodwill of $32,000 isreported?c. What balance will be assigned to thenoncontrolling interest in theconsolidated balance sheet if Paradepays $79,300 to acquire its ownershipand goodwill of $25,000 is reported?

An intangible asset called goodwill is connected to the acquisition of one business by another. It…

Summer Company holds assets with a fair value of $125,000 and a book value of $93,000 and liabilities with a book value and fair value of $28,000. Required: Compute the following amounts if Parade Corporation acquires 65 percent ownership of Summer: a. What amount did Parade pay for the shares if no goodwill and no gain on a

Summer Company holds assets with a fair value of $125,000 and a book value of $93,000 and liabilities with a book value and fair value of $28,000. Required: Compute the following amounts if Parade Corporation acquires 65 percent ownership of Summer: a. What amount did Parade pay for the shares if no goodwill and no gain on a

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

Summer Company holds assets with a
fair value of $125,000 and a book
value of $93,000 and liabilities with a
book value and fair value of $28,000.
Required:
Compute the following amounts if
Parade Corporation acquires 65
percent ownership of Summer:
a. What amount did Parade pay for the
shares if no goodwill and no gain on a
bargain purchase are reported?
b. What amount did Parade pay for the
shares if the fair value of the
noncontrolling interest at acquisition is
$45,150 and goodwill of $32,000 is
reported?
c. What balance will be assigned to the
noncontrolling interest in the
consolidated balance sheet if Parade
pays $79,300 to acquire its ownership
and goodwill of $25,000 is reported?

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