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Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair value...

Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair value of Float's net assets was $1,850,000, and the book value was $1,500,000. The noncontrolling interest shares of Float Corp. are not actively traded. What is the dollar amount of noncontrolling interest that should appear in a consolidated balance sheet prepared at the date of acquisition?

a.

$350,000.

b.

$300,000.

c.

$400,000.

d.

$370,000.

Solutions

Expert Solution

Answer: c. $ 400,000

Total fair value = $ 1,600,000 / 0.8 = $ 2,000,000

Amount of noncontrolling interest = $ 2,000,000 - $ 1,600,000 = $ 400,000.

ekkarill92 answered 2 years ago
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