Par Corporation paid $7,200,000 for 360,000 shares of Sun Corporations outstanding voting common stock on January 1,

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Par Corporation paid $7,200,000 for 360,000 shares of Sun Corporation’s outstanding voting common stock on January 1, 2011, when the stockholders’ equity of Sun consisted of (in thousands):

10% cumulative, preferred stock, $100 par. Liquidation

preference is $105 per share, and 20,000 shares are issued

and outstanding with one year’s dividends in arrears ...... $2,000

Common stock, $10 par, 400,000 shares issued and

outstanding ...................... 4,000

Other paid-in capital ..................... 1,000

Retained earnings ...................... 1,300

Total stockholders’ equity ................... $8,300

During 2011, Sun reported net income of $1,000,000 and declared dividends of $800,000. Any excess of fair value over book value is goodwill, which is not amortized.

REQUIRED: Calculate the following:

1. Goodwill from Par’s acquisition of Sun

2. Par’s income from Sun for 2011

3. Noncontrolling interest share for 2011

4. Noncontrolling interest in Sun at December 31, 2011

5. Par’s Investment in Sun account balance at December 31, 2011


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...
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Advanced Accounting

ISBN: 9780132568968

11th Edition

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

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