Assume that all of the facts in Problem 5 remain unchanged except that Green paid $201,000 for 60 of the voting shares of Mansford Required (a) Prepare a consolidated balance sheet at January 1, Year 1 (b) Calculate goodwill and non controlling interest under parent company extension theory (c) Exp...

a The deferred tax liability and the allocation of the Acquisition differential for Problem 6 are th ...

Assume that all of the facts in Problem 5 remain unchanged except that Green paid $201,000 for

Question:

Assume that all of the facts in Problem 5 remain unchanged except that Green paid $201,000 for 60% of the voting shares of Mansford.
Required:
(a) Prepare a consolidated at January 1, Year 1.
(b) Calculate and non-controlling interest under parent company extension theory.
(c) Explain how the definition of a liability supports the recognition of a deferred income tax liability when a parent purchases shares in a subsidiary and the fair values of the subsidiary’s identifiable net assets are greater than their carrying amounts.
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...