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    4-14: Noncontrolling interest: David Company acquired 60 per

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    David Company acquired 60 percent of Mark Company for $300,000 when Mark's book value was $400,000. On that date, Mark had equipment (with a 10-year life) that was undervalued in the financial records by $60,000. Also, buildings (with a 20-year life) were undervalued by $40,000. Two years later, the following figures are reported by these two companies (stockholders' equity accounts have been omitted).

    Mark
    David Mark Company
    company company Fair Market
    Book Value Book Value value
    Current assets . . . . . . . . . . . . . . . . $ 620,000 300,000 320,000
    Equipment . . . . . . . . . . . . . . . . . . . 260,000 200,000 280,000
    Buildings . . . . . . . . . . . . . . . . . . . . . 410,000 150,000 150,000
    Liabilities . . . . . . . . . . . . . . . . . . . . . (390000) (120,000) (120,000)
    Revenues . . . . . . . . . . . . . . . . . . . . (900,000) (400,000)
    Expenses . . . . . . . . . . . . . . . . . . . . . 500,000 300,000
    Investment income . . . . . . . . . . . . . not given

    14. What is the consolidated balance of the Equipment account?
    a. $488,800
    b. $498,400
    c. $500,800
    d. $508,000

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    https://brainmass.com/business/accounting/4-14-noncontrolling-interest-david-company-acquired-60-per-73846

    Solution Preview

    Total book value of equipment = 260,000+200,000=460,000
    Excess purchase price ...

    Solution Summary

    Answers a conceptual question on non-controlling interest.

    $2.19

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