P Incorporated purchased 80% of The S Company on January 2, 2014, when S's book value was $800,000. P paid $700,000 for their acquisition, and the fair value of noncontrolling interest was $175,000. At the date of acquisition, the fair value and book value of S's identifiable assets and liabilities were equal. At the end of the year, the separate companies reported the following balances. Assuming that S has paid no dividends during the year, what is the ending balance of the noncontrolling interest in the subsidiary?
P Incorporated purchased 80% of The S Company on January 2, 2014, when S's book value was $800,000. P paid $700,000 for their acquisition, and the fair value of noncontrolling interest was $175,000. At the date of acquisition, the fair value and book value of S's identifiable assets and liabilities were equal. At the end of the year, the separate companies reported the following balances. Assuming that S has paid no dividends during the year, what is the ending balance of the noncontrolling interest in the subsidiary?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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P Incorporated purchased 80% of The S Company on January 2, 2014, when S's book value was $800,000. P paid $700,000 for their acquisition, and the fair value of noncontrolling interest was $175,000. At the date of acquisition, the fair value and book value of S's identifiable assets and liabilities were equal. At the end of the year, the separate companies reported the following balances. Assuming that S has paid no dividends during the year, what is the ending balance of the noncontrolling interest in the subsidiary?
Transcribed Image Text:Current assets
Plant & equipment
Investment in Solar
Goodwill
Current liabilities
Long-term debt
Stockholder's Equity
5,700,000
15,200,000
780,000
0
3,600,000
11,680,000
6,400,000
1,250,000
3,400,000
0
0
950,000
2,800,000
900,000
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