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On January 3, 20X9, Pine Company acquired 75 percent of Sap Company's outstanding common stock for cash. The fair value of the noncontrolling interest was equal to a proportionate share of the book value of Sap Company's net assets at the date of acquisition. Selected balance sheet data at December 31, 20X9, are as follows: Pine Sap Total Assets $ 504,000 $ 216,000 Liabilities 144,000 72,000 Common Stock 120,000 60,000 Retained Earnings 240,000 84,000 Total Liabilities and Equity 504,000 216,000 Based on the preceding information, what amount should be reported as noncontrolling interest in net assets in Pine Company's December 31, 20X9, consolidated balance sheet

Respuesta :

Zviko

Answer:

$36,000

Explanation:

The Parent may choose to measure Non-Controlling Interest as :

  1. Fair Value at Acquisition Date or
  2. Equal to the Proportionate Share of Assets and Liabilities Acquired

Note :  Pine Company elected to measure Non-controlling Interest equal to a proportionate share of the book value of Sap Company's net assets at the date of acquisition.

Step 1 Determine Sap Company's net assets at the date of acquisition.

Net Assets = Total Assets - Total Liabilities

                  = $ 216,000 - $72,000

                  = $ 144,000

Step 2 Determine the Value of Non- Controlling Interest equal to a proportionate share of The Net Asset of Sap

NCI = $ 144,000×25%

      = $36,000

Therefore, the amount of Non-Controlling Interest in net assets in Pine Company's December 31, 20X9 is $36,000

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