Question
Dell Company acquires 80% of Kemers Company for $500,000 on January 1, 2010. Kemers reported common stock of $300,000 and retained earnings of $210,000 on
Dell Company acquires 80% of Kemers Company for $500,000 on January 1, 2010. Kemers reported common stock of $300,000 and retained earnings of $210,000 on that date. Equipment was undervalued by $30,000 and buildings were undervalued by $40,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Kemers earns income and pays dividends during 2010 of $100,000 and $40,000, respectively. Assuming the equity method is applied and all shares are traded the same at the date of acquisition, compute the noncontrolling interest at December 31, 2010.
$135,600 | ||
$137,000 | ||
$112,000 | ||
$100,000 |
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