Purchase Solution

Noncontrolling interest: David Company acquired 60 percent

Not what you're looking for?

Ask Custom Question

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

13. What is the noncontrolling interest's share of the subsidiary's income and what is the ending balance
of the noncontrolling interest in the subsidiary?
a. $42,000 and $252,000
b. $40,000 and $212,000
c. $38,080 and $208,160
d. $35,200 and $207,200

Purchase this Solution

Solution Summary

Answers a conceptual question on non-controlling interest.

Solution Preview

The non-controlling interest is 40%, so income share is ...

Purchase this Solution


Free BrainMass Quizzes
Motivation

This tests some key elements of major motivation theories.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media