Answered step by step
Verified Expert Solution
Question
1 Approved Answer
7) What is the NCI balance on 12/31/19 ? 1.On 1/1/2019, Choco Corp. acquired 90% of the voting common stock of Allie Inc.
7) What is the "NCI" balance on 12/31/19?
1.On 1/1/2019, Choco Corp. acquired 90% of the voting common stock of Allie Inc. for $180,000 and the fair value of non-controlling interest (NCI) on acquisition date was $20,000. There is no control premium for Choco' acquisition of Allie. Following is intra- entity inventory (downstream) sales between Choco and Allie in 2019 and 2020. Transfer price Historical cost % of intra-entity inventory sales unsold at the end of each year 2019 $670,000 $603,000 40% 2020 $500,000 $425,000 50% 0 On 1/1/2019, Choco allocated the entire $70,000 excess fair value over book value of Allie as a Trademark (with an estimated remaining life of 7 years). Choco uses the equity method to account for its investment in Allie. Following is net income and dividends information for Choco and Allie in 2019 and 2020. 2019 2020 Choco Allie Choco Allie Net income $550,000 $400,000 $650,000 $600,000 Dividends $220,000 $100,000 $320,000 $120,000 Book value of Allie's net assets on 1/1/2019 is $130,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started