Question
Shahidullah Research Co. acquired 60% of Nahar Beauty Co. for $420,000 on December 31, 2019 when Nahar's book value was $560,000. Shahidullahs stock was not
Shahidullah Research Co. acquired 60% of Nahar Beauty Co. for $420,000 on December 31, 2019 when Nahar's book value was $560,000. Shahidullahs stock was not actively traded. On the date of acquisition, Nahar had equipment (with a ten-year life) that was undervalued in the financial records by $140,000. One year later, the two companies provided the selected amounts shown below. Additionally, no dividends have been paid.
| Shahidullah Co. | Nahar Co. | |||||||
| Book Value | Book Value | Fair Value | ||||||
Current assets | $ | 868,000 |
| $ | 420,000 |
| $ | 448,000 |
|
Equipment |
| 364,000 |
|
| 280,000 |
|
| 400,000 |
|
Buildings |
| 574,000 |
|
| 210,000 |
|
| 210,000 |
|
Liabilities |
| (546,000 | ) |
| (168,000 | ) |
| (168,000 | ) |
Revenues |
| (1,260,000 | ) |
| (560,000 | ) |
|
|
|
Expenses |
| 700,000 |
|
| 420,000 |
|
|
|
|
Investment income |
| Not Given |
|
|
|
|
|
|
|
- What amount of consolidated net income for 2020 is attributable to Shahidullahs controlling
interest?
- What is the noncontrolling interest's share of the subsidiary's net income for the year ended
December 31, 2020?
- What is the ending balance of the noncontrolling interest in the subsidiary at December 31,
2020?
D. What is the consolidated balance of the Equipment account at December 31, 2020?
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