Pesto Company paid $$10$ per share to acquire $80\%$ of Sauce Company's $100,000$ outstanding shares; however the market price of

the remaining shares was $$8\mathrm{.}50.$ The fair value of Sauce's net assets at the time of the acquisition was $$850,000.$ In this case, where

Pesto paid a premium to achieve control:

The total value assigned to the NCI at the date of the acquisition may be less than the NCI percentage of the fair value of

the net assets.

Goodwill is assigned $80\%$ to Pesto and $20\%$ to the NCI.

The NCI share of goodwill would be reduced to zero.

Pesto would recognize a gain on the acquisition.