LO1 14. Consolidation of noncontrolling interest Assume a parent company owns less than 100% of a long-controlled subsidiary. Which of the following slatements is false? a. Balance sheet presentation of noncontrolling interest is necessary because consolidated balances always reflect 100% of the net assets of the subsidiary. b. Noncontrolling interest represents the portion of the subsidiary's net assets that is not owned by the parent. c. Goodwill is always assigned to the controlling and noncontrolling interests in the relative proportion of their ownership interests. d. Noncontrolling interest is classified as an owners' equity acoount. Lot 15. Assigning goodwill to controlling and noncontrolling interests Assume a parent company purchased less than 100% of the voting common stock when it acquired a controlling interest in a subsidiary on August 15, 2022. The parent uses the equity method to account v Cambridge Business Publlshers Chapter 5 | Consolidated Financial Statements with Less Then 100% Ownership for the subsidiary on its pre-consolidation books. Both companies have a December 31, 2022 fiscal year end. Which of the following statements is correct? a. The amount of total assets reported in the consolidated balance sheet is usually less than total assets in the parent company's pre-consolidation balance sheet. b. In the balance sheet prepared immediately after the acquisition, the parent company's preconsolidation retained carnings will always equal consolidated retained earnings. c. Consolidated net income for the year ended December 31, 2022 will include 100\% of the subsidiary's income for the entire year. d. Noncontrolling interest reported in the consolidated balance sheet always equals the peroentage of shares held by the noncontrolling shareholders multiplied by the pre-acquisition reported net assets of the subsidiary. 16. Assigning goodwill to controlling and noncontrolling interests L01 Assume on July 1,2022 , a parent company paid $2,445,300 to purchase a 75% interest in a subsidiary's voting common stock. On that date, the fair value of the 25% interest not purchased by the parent company is $812,500. The acquisition-date fair value of the identifiable net assets of the subsidiary is $3,120,000. What is the amount of goodwill assigned to the controlling and noncontrolling interests, respectively, on the acquisition date? a. $105,300 and $32,500 b. $104,000 and $33,800 c. $103,350 and $34,450 d. $97,500 and $32,500 17. Assigning bargain purchase gain (i.e., "negative goodwill") to controlling and noncontrolling Lo1 interests Assume on July 1, 2022, a parent company paid $1,656,000 to purchase an 80% interest in a subsidiary's voling common stock. On that date, the fair value of the 20% interest not purchased by the parent company is $414,000. The acquisition-date fair value of the identifiable net assets of the subsidiary is $2,160,000. What is the amount of goodwill (or bargain purchase gain) assigned to the controlling and noncontrolling interests, respectively, on the acquisition date? a. $72,000 goodwill assigned to the controlling interest and $18,000 goodwill assigned to the noncontrolling interest b. $45,000 bargain purchase gain assigned to the controlling interest and $45,000 bargain purchase gain assigned to the noncontrolling interest c. $72,000 bargain purchase gain assigned to the controlling interest and $18,000 bargain purchase gain assigned to the noncontrolling interest d. $90,000 bargain purchase gain assigned to the controlling interest and zero assigned to the noncontrolling interest