Question
XXX Corporation acquired an 80% interest in YYY Corporation on January 1, 2020, for $120,000 cash when YYY had Capital Stock of $60,000 and Retained
XXX Corporation acquired an 80% interest in YYY Corporation on January 1, 2020, for $120,000 cash when YYY had Capital Stock of $60,000 and Retained Earnings of $60,000. The fair value/book value difference was attributable to equipment with a 10-year (straight-line) expected useful life. YYY suffered a $30,000 net loss in 2020 and paid $ 10,000 dividends. XXX's separate income for 2020 was $250,000.
Required:
(1) Compute the total controlling share of net income
(2) Compute the noncontrolling share of net income
Step by Step Solution
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Step: 1
First we will calculate an excess of purchase consideration over the book value which will giv...
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Cornerstones of Financial Accounting
Authors: Jay Rich, Jeff Jones
4th edition
978-1337690881, 9781337669450, 1337690880, 1337690899, 1337669458, 978-1337690898
