Multiple Choice Quesitons| 1. If Pomegranate follows IFRS and uses the alternative method of valuing the noncontrolling

Question:

Multiple Choice Quesitons|
1. If Pomegranate follows IFRS and uses the alternative method of valuing the noncontrolling interest, at the date of acquisition the noncontrolling interest in Starfruit appears in the equity section of the consolidated in the amount of
a. $7,800,000
b. $6,300,000
c. $2,800,000
d. $1,300,000
2. If Pomegranate follows IFRS and uses the alternative method of valuing the noncontrolling interest, the 2014 noncontrolling interest in net income of Starfruit is
a. $150,000
b. $175,000
c. $200,000
d. $750,000
Use the following information to answer questions l - 7 below:
On January l, 2012, Pomegranate Company acquired 90% of the voting stock of Starfruit Company for $91,700,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $6,300,000. Starfruit's book value was $13,000,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10-year life, straight-line) was overvalued by $25,000,000. Starfruit Company had previously unreported , with a market value of $40,000,000 and 5-year life, straight-line, which were capitalized following
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