The following balances were taken from the records of S Company:
P Company purchased 75% of S Company's common stock on January 1,2014 for $900,000.The difference between implied value and book value is attributable to assets with a remaining useful life on January 1,2016 of ten years.
Required:
A.Compute the difference between cost/(implied)and book value applying:
1.Parent company theory.
2.Economic unit theory.
B.Assuming the economic unit theory:
1.Compute noncontrolling interest in consolidated income for 2016.
2.Compute noncontrolling interest in net assets on December 31,2016.

Question

The following balances were taken from the records of S Company:
  P Company purchased 75% of S Company's common stock on January 1,2014 for $900,000.The difference between implied value and book value is attributable to assets with a remaining useful life on January 1,2016 of ten years.
Required:
A.Compute the difference between cost/(implied)and book value applying:
1.Parent company theory.
2.Economic unit theory.
B.Assuming the economic unit theory:
1.Compute noncontrolling interest in consolidated income for 2016.
2.Compute noncontrolling interest in net assets on December 31,2016.

Quizplus · Accepted Answer

The Answer of The following balances were taken from the records of S Company:
  P Company purchased 75% of S Company's common stock on January 1,2014 for $900,000.The difference between implied value and book value is attributable to assets with a remaining useful life on January 1,2016 of ten years.
Required:
A.Compute the difference between cost/(implied)and book value applying:
1.Parent company theory.
2.Economic unit theory.
B.Assuming the economic unit theory:
1.Compute noncontrolling interest in consolidated income for 2016.
2.Compute noncontrolling interest in net assets on December 31,2016.

The Following Balances Were Taken from the Records of S