Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

E 8-5 Subsidiary issues additional shares Pupuk Corporation paid $2,500,000 for an 80 percent interest (1,800,000 shares) in Soil Corporation on January 1, 2016 The

image text in transcribed
E 8-5 Subsidiary issues additional shares Pupuk Corporation paid $2,500,000 for an 80 percent interest (1,800,000 shares) in Soil Corporation on January 1, 2016 The book value of Soil's net assets equaled fair value, except undervalued equipment of $50,000 with a five-year remain ing useful life, and Soil's common stock and retained earnings were $2,000,000 and $500,000, respectively. During 2016, Soil declared $25,000 dividends and reported $200,000 net income. On January 1, 2017, Pupuk directly purchased 60,000 shares of previously unissued common stock from Soil for $15 each. For 2017, Soil's net income was $225,000 and dividend declared was $25,000 REQUIRED: Determine the following: a. The balance of Pupuk's Investment on Soil account at December 31, 2016 b. Goodwill amount that should appear on the consolidated balance sheet at December 31, 2017 c. Additional paid in capital at December 31, 2017, if Soil sold the issued shares to a third party d. Noncontrolling interest at December 31, 2017, if Soil sold the issued shares to a third party E 8-5 Subsidiary issues additional shares Pupuk Corporation paid $2,500,000 for an 80 percent interest (1,800,000 shares) in Soil Corporation on January 1, 2016 The book value of Soil's net assets equaled fair value, except undervalued equipment of $50,000 with a five-year remain ing useful life, and Soil's common stock and retained earnings were $2,000,000 and $500,000, respectively. During 2016, Soil declared $25,000 dividends and reported $200,000 net income. On January 1, 2017, Pupuk directly purchased 60,000 shares of previously unissued common stock from Soil for $15 each. For 2017, Soil's net income was $225,000 and dividend declared was $25,000 REQUIRED: Determine the following: a. The balance of Pupuk's Investment on Soil account at December 31, 2016 b. Goodwill amount that should appear on the consolidated balance sheet at December 31, 2017 c. Additional paid in capital at December 31, 2017, if Soil sold the issued shares to a third party d. Noncontrolling interest at December 31, 2017, if Soil sold the issued shares to a third party

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quantitative Finance: An Object-Oriented Approach In C++

Authors: Erik Schlogl, Dilip B. Madan

1st Edition

1584884797, 978-1584884798

More Books

Students also viewed these Finance questions

Question

What kinds of communication help sustain long-distance romances?

Answered: 1 week ago