Stick Company reports net assets with a book value and fair value of $204,000. Paste Corporation acquires 75 percent ownership for $153,000. Paste reports net assets with a book value of $529,000 and a fair value of $635,000 at that time, excluding its investment in Stick. Required: For each of the following, compute the amounts that would be reported immediately after the combination under current accounting practice:

a. Consolidated net identifiable assets.

b. Noncontrolling interest.

Question

Business

Adam Burnett

15 August, 20:14

Stick Company reports net assets with a book value and fair value of $204,000. Paste Corporation acquires 75 percent ownership for $153,000. Paste reports net assets with a book value of $529,000 and a fair value of $635,000 at that time, excluding its investment in Stick. Required: For each of the following, compute the amounts that would be reported immediately after the combination under current accounting practice:

a. Consolidated net identifiable assets.

b. Noncontrolling interest.

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Answers (1)

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Mohamed · Answer 1

a. i) Consolidated Net Identifiable Assets Under Book value method=$529,000+$153000=$682,000

ii) Consolidated Net Identifiable Assets Under fair value method=$635,000+$153000=$788,000

b. Noncontrolling interest=$51000 (204000-153000)

Explanation:

Consolidated Net identifiable assets are recorded in balance sheet in Non-Current Assets whereas Noncontrolling interest ins recorded on liability side.