Treasury Stock Held by Subsidiary Pool Company purchased 90% of the outstanding common stock of Spruce Company on December 31, 2004, for cash. At that time the balance sheet of Spruce Company was as follows: LO7 Current Assets $1,050,000 Plant and Equipment 990,000 Land 170,000 Total Assets $2,210,000 Liabilities $ 820,000 Common Stock, $20 par value 900,000 Other Contributed Capital 440,000 Retained Earnings 150,000 Total 2,310,000 Less Treasury Stock at Cost, 5,000 shares 100,000 Total Equities $2,210,000 Required:
A. Prepare the elimination entry required for the preparation of a consolidated balance sheet workpaper on December 31, 2004, assuming:
(1) The purchase price of the stock was $1,400,000.
(2) The purchase price of the stock was $1,160,000.
Assume further that any difference between the cost of the investment and the book value of net assets acquired relates to subsidiary land.
B. Compute the amount of the noncontrolling interest that would appear on the December 31, 2004 consolidated balance sheet.