On January 1, 2021, Nichols Company acquired 80% of Smith Company's common stock and 40% of its non-voting, cumulative preferred stock. The consideration transferred by Nichols was $1,200,000 for the common and $124,000 for the preferred. There was no premium in the value of consideration transferred. Any excess acquisition-date fair value over book value is considered goodwill. The capital structure of Smith immediately prior to the acquisition is: Compute the noncontrolling interest in Smith at date of acquisition.
A)$486,000.
B)$480,000.
C)$300,000.
D)$150,000.
E)$120,000.

Question

On January 1, 2021, Nichols Company acquired 80% of Smith Company's common stock and 40% of its non-voting, cumulative preferred stock. The consideration transferred by Nichols was $1,200,000 for the common and $124,000 for the preferred. There was no premium in the value of consideration transferred. Any excess acquisition-date fair value over book value is considered goodwill. The capital structure of Smith immediately prior to the acquisition is:  Compute the noncontrolling interest in Smith at date of acquisition.
A)$486,000. 
B)$480,000. 
C)$300,000. 
D)$150,000. 
E)$120,000.

Quizplus · Accepted Answer

The Answer of On January 1, 2021, Nichols Company acquired 80% of Smith Company's common stock and 40% of its non-voting, cumulative preferred stock. The consideration transferred by Nichols was $1,200,000 for the common and $124,000 for the preferred. There was no premium in the value of consideration transferred. Any excess acquisition-date fair value over book value is considered goodwill. The capital structure of Smith immediately prior to the acquisition is:  Compute the noncontrolling interest in Smith at date of acquisition.
A)$486,000. 
B)$480,000. 
C)$300,000. 
D)$150,000. 
E)$120,000.

On January 1, 2021, Nichols Company Acquired 80% of Smith