Polaris Incorporated purchased 80% of The Solar Company on January 2, 2011, when Solar's book value was $800,000.Polaris 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 Solar's identifiable assets and liabilities were equal.At the end of the year, the separate companies reported the following balances:
Requirement 1: Calculate consolidated balances for each of the accounts as of December 31, 2011.
Requirement 2: Assuming that Solar has paid no dividends during the year, what is the ending balance of the noncontrolling interest in the subsidiary?

Question

Polaris Incorporated purchased 80% of The Solar Company on January 2, 2011, when Solar's book value was $800,000.Polaris 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 Solar's identifiable assets and liabilities were equal.At the end of the year, the separate companies reported the following balances:
  Requirement 1: Calculate consolidated balances for each of the accounts as of December 31, 2011.
Requirement 2: Assuming that Solar has paid no dividends during the year, what is the ending balance of the noncontrolling interest in the subsidiary?

Quizplus · Accepted Answer

The Answer of Polaris Incorporated purchased 80% of The Solar Company on January 2, 2011, when Solar's book value was $800,000.Polaris 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 Solar's identifiable assets and liabilities were equal.At the end of the year, the separate companies reported the following balances:
  Requirement 1: Calculate consolidated balances for each of the accounts as of December 31, 2011.
Requirement 2: Assuming that Solar has paid no dividends during the year, what is the ending balance of the noncontrolling interest in the subsidiary?

Polaris Incorporated Purchased 80% of the Solar Company on January