On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by purchasing 40,000 shares of
Question:
On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by purchasing 40,000 shares of Siena’s common stock. There was no differential related to this transaction. The non-controlling interest had a fair value equal to 20 percent of book value. The book value of Siena on December 31, 20X7 was as follows: Common Stock ($10 par value) $ 500,000 Retained Earnings 350,000 Total $ 850,000 On January 1, 20X8, Siena sold an additional 12,500 shares to a non affiliate for $25 per share.
Based on the preceding information, what is the ending balance in non-controlling interest in the net assets of Siena?
A) $186,000
B) $418,500
C) $523,125
D) $232,500
Based on the preceding information, the elimination entry to prepare the consolidated financial statements on December 31, 20X7 would include a:
A) debit to common stock for $812,500
B) credit to additional paid-in capital for $187,500
C) credit to Investment in Siena Co. for $744,000
D) credit to retained earnings for $350,000
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni