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A company issues new stock with a fair value of $120,000 to acquire 85% of the...

A company issues new stock with a fair value of $120,000 to acquire 85% of the stock of another company. The fair value of the noncontrolling interest at the date of acquisition is $19,000, and the book value of the acquired company is $15,000. The subsidiary's net assets are reported at amounts approximating fair value at the date of acquisition, except that its plant assets are overvalued by $25,000, its reported license agreements are undervalued by $30,000, and it has previously unreported identifiable intangible assets with a fair value of $50,000.

What is the goodwill to the noncontrolling interest, following U.S. GAAP?

A.

$ 8,500
B.

$0
C.

$ 7,500
D.

$10,350
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Answer is highlighted in yellow: Solution: D. $10,350 Answer: Explanation: Acquisition cost Add: Fair value of NCI Less: Fair

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