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Pele Company acquires 20%4 of Diego Company for $500-000 on January 1, 2019; there was no control premium. Diego reported common stock of $300,000 and
Pele Company acquires 20%4 of Diego Company for $500-000 on January 1, 2019; there was no control premium. Diego 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 540,000, ench having a 10-year remaining life. Any remaining excess was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired. Diego carned income and paid dividends as follows: Net income Dividends 2019 $100,000 40,000 60 400 2020 $120.000 50,000 70 2021 $130.000 60.000 70 Assume the equity method is applied. Compute the non controlling interest in Diego on December 31st 2019 (ending NCI) A. 135,000 B. 137,000 C. 112,000 D. 100,000 E. 118, 600
Pele Company acquires 20%4 of Diego Company for $500-000 on January 1, 2019; there was no
control premium. Diego 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
540,000, ench having a 10-year remaining life. Any remaining excess was attributed to goodwill
with an indefinite life. Based on an annual review, goodwill has not been impaired.
Diego carned income and paid dividends as follows:
Net income
Dividends
2019
$100,000
40,000
60
400
2020
$120.000
50,000
70
2021
$130.000
60.000
70
Assume the equity method is applied.
Compute the non controlling interest in Diego on December 31st 2019 (ending NCI)
A. 135,000
B. 137,000
C. 112,000
D. 100,000
E. 118, 600
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