Homework Answers
D.I and IV
total value of frazer equity = $430,000.
Redding company paid $344,000 to acquire interest
=>percentage of control = $344,000 / 430,000 =>0.80 =>80%.....(so I is true).
Non controlling interest = total equity - redding company interest
=>$430,000 - 344,000 =>$86,000.....(so IV is correct).
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Exercise 3-3
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Exercise 3-3
On January 2, 2014, Prunce Company acquired 90% of the outstanding
common stock of Sun Company for $180,700 cash. Just before the
acquisition, the balance sheets of the two companies were as
follows:
Prunce
Sun
Cash
$282,130
$ 59,040
Accounts receivable (net)
142,020
24,810
Inventory
118,670
53,230
Plant and equipment (net)
395,640
92,960
Land
62,550
29,220
Total asset
$1,001,010
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Accounts payable
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$ 50,420
Mortgage payable
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37,660
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421,400
76,960
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