Question

On August 31, 2018, Hoselaw Inc. (Hoselaw) purchased 60 percent of the common shares of Upsalquitch Ltd. (Upsalquitch) for $8,000,000. At the time of the purchase, Upsalquitch’s management made the following estimates of the fair values of Hoselaw’s assets and liabilities:


Required:
a. Calculate the amount of non-controlling interest that Hoselaw would report on its August 31, 2018 consolidated balance sheet as a result of its purchase of Upsalquitch.
b. What amount would be included in each asset and liability account on the August 31, 2018 consolidated balance sheet as a result of the purchase of Upsalquitch?
c. What does non-controlling interest on the balance sheet represent? Explain why it appears. How should users of financial statements interpret non-controlling interest?


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  • CreatedFebruary 26, 2015
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