Post Corporation paid $330,000 cash for 75% of the outstanding common stock of Soft Company on...

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Post Corporation paid $330,000 cash for 75% of the outstanding common stock of Soft Company on...

Post Corporation paid $330,000 cash for 75% of the outstanding common stock of Soft Company on January 1, 2020. There was no control premium and the fair value of the noncontrolling interest was $110,000 on January 1, 2020. Differences between book value and fair value of the net identifiable assets of Soft Company on January 1, 2020, were limited to the following:

Book value Fair value

Inventories $ 25,000 $ 35,000

Building (net) 175,000 173,000

Goodwill is allocated in proportion to ownership interests if there was no control premium.

business accounting

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Answer 1

Answer #1

	Particulars	Amount	Amount
A	Amount paid for acquiring 75% common stock		$ 330,000.00
B	Fair value of non controlling interest 25%		$ 110,000.00
C	Fair value of whole firm ( B/25%)		$ 440,000.00
D	Net book value of Assets
	Inventories	$ 35,000.00
	Building (net)	$ 173,000.00	$ 208,000.00
E	Goodwill of firm (C-D)		$ 232,000.00
F	Goodwill according to ownership interests
	-Post corporation [75%]		$ 174,000.00
	-Non-controlling interest[25%]		$ 58,000.00

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Answer 2

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