Power Corporation acquired 70 percent of Silk Corporation’s common stock on December 31, 20X2. Balance sheet data for the two companies immediately following the acquisition follow:
At the date of the business combination, the book values of Silk’s net assets and liabilities approximated fair value except for inventory, which had a fair value of $85,000, and land, which had a fair value of $45,000. The fair value of the noncontrolling interest was $64,500 on December 31, 20X2.
For each question below, indicate the appropriate total that should appear in the consolidated balance sheet prepared immediately after the business combination.
1. What amount of inventory will be reported?
2. What amount of goodwill will be reported?
3. What amount of total assets will be reported?
4. What amount of total liabilities will be reported?
5. What amount will be reported as noncontrolling interest?
6. What amount of consolidated retained earnings will be reported?
7. What amount of total stockholders’ equity will be reported?