16% 12:38 PM Tue beinally been issued several years ago at 92, reflecting a 10 percent effective interest rate. On the date of purchase, the carrying amount of the bonds payable was $50,400. Snedeker paid $49,200 based on a 12 percent effective interest rate over the remaining life of the bonds. What is the noncontrolling interest's share of consolidated net income? a. $40,200 b. $44,100 c. $40,560 d. $44,460 LO 6-3 15. Pesto Company possesses 80 percent of Salerno Company's outstanding voting stock. Pesto uses the initial value method to account for this investment. On January 1, 2017, Pesto sold 9 percent bonds payable with a $10 million face value (maturing in 20 years) on the open market at a premium of $600,000. On January 1, 2020, Salerno acquired 40 percent of these same bonds from an outside party at 96.6 percent of face value. Both companies use the straight-line method of amortization. For a 2021 consolidation, what adjustment should be made to Pesto's beginning Retained Earnings as a result of this bond acquisition? a. $320,000 increase b. $326,000 increase c. $331,000 increase d. $340,000 increase LO 6-4 16. On January 1, Tesco Company spent a total of $4,384,000 to acquire control over Blondel Company. This price was based on paying $424,000 for 20 percent of Blondel's preferred stock and $3,960,000 for 90 percent of its outstanding common stock. At the acquisition date, the fair value of the 10 percent noncontrolling interest in Blondel's common stock was $440,000. The fair value of the 80 percent of Blondel's preferred shares not owned by Tesco was $1,696,000. Blondel's stockholders' equity accounts at January 1 were as follows: Preferred stock-9%, $100 par value, cumulative and participating; 10,000 shares outstanding $1,000,000 Common stock-$50 par value; 40,000 shares outstanding 2,000,000 Retained earnings 3,000,000 Total stockholders' equity $6,000,000 Tesco believes that all of Blondel's accounts approximate their fair values within the company's financial statements. What amount of consolidated goodwill should be recognized? a. $ 300,000 b. $ 316,000 c. $ 364,000 16% 12:38 PM Tue beinally been issued several years ago at 92, reflecting a 10 percent effective interest rate. On the date of purchase, the carrying amount of the bonds payable was $50,400. Snedeker paid $49,200 based on a 12 percent effective interest rate over the remaining life of the bonds. What is the noncontrolling interest's share of consolidated net income? a. $40,200 b. $44,100 c. $40,560 d. $44,460 LO 6-3 15. Pesto Company possesses 80 percent of Salerno Company's outstanding voting stock. Pesto uses the initial value method to account for this investment. On January 1, 2017, Pesto sold 9 percent bonds payable with a $10 million face value (maturing in 20 years) on the open market at a premium of $600,000. On January 1, 2020, Salerno acquired 40 percent of these same bonds from an outside party at 96.6 percent of face value. Both companies use the straight-line method of amortization. For a 2021 consolidation, what adjustment should be made to Pesto's beginning Retained Earnings as a result of this bond acquisition? a. $320,000 increase b. $326,000 increase c. $331,000 increase d. $340,000 increase LO 6-4 16. On January 1, Tesco Company spent a total of $4,384,000 to acquire control over Blondel Company. This price was based on paying $424,000 for 20 percent of Blondel's preferred stock and $3,960,000 for 90 percent of its outstanding common stock. At the acquisition date, the fair value of the 10 percent noncontrolling interest in Blondel's common stock was $440,000. The fair value of the 80 percent of Blondel's preferred shares not owned by Tesco was $1,696,000. Blondel's stockholders' equity accounts at January 1 were as follows: Preferred stock-9%, $100 par value, cumulative and participating; 10,000 shares outstanding $1,000,000 Common stock-$50 par value; 40,000 shares outstanding 2,000,000 Retained earnings 3,000,000 Total stockholders' equity $6,000,000 Tesco believes that all of Blondel's accounts approximate their fair values within the company's financial statements. What amount of consolidated goodwill should be recognized? a. $ 300,000 b. $ 316,000 c. $ 364,000