Assume that Rice and Associates in P8-11 purchased 80 percent of the 10,000 shares of outstanding stock

Question:

Assume that Rice and Associates in P8-11 purchased 80 percent of the 10,000 shares of outstanding stock of Rachel for $140,000 cash.

REQUIRED:

a. Prepare the journal entries recorded by Rice to recognize the acquisition.

b. Prepare a consolidated work sheet and a consolidated balance sheet.

c. Compute non-controlling interest and goodwill assuming that Rice uses IFRS and exercises its option to compute non-controlling interest assuming that the minority shareholders have no equity interest in the goodwill.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...