On January 3, 2020, Redding Company acquired 90 percent of Frazier company's common stock for $405,000...

  

Transcribed Image Text:

On January 3, 2020, Redding Company acquired 90 percent of Frazier company's common stock for $405,000 in cash. At the acquisition date, the book values and fair values of Eraizer's assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 10 percent of the total book value of Fraizer The stockholders' equity accounts of the two companies at acquisition date are: Common Stock ($5 par value) Additional Paid in Capital Retained Earnings Total Stockholders' Equity REDDING $500,000 320,000 400,000 . $1,220,000 FRAZIER $200,000 100,000 150,000 $450,000 NCI was assigned $20,000 in Redding's consolidated income statement for 2020. Beddings net income from its own operations (excluding investment income) is $750,000 for the year 2020. Frazier declared $18,000 in cash dividends. Required a. What is the balance in the investment in Frazier account on the books of Redding on December 31, 2020? b. Present the consolidation journal entry needed to prepare the December 31, 2020 consolidated financial statements. On January 3, 2020, Redding Company acquired 90 percent of Frazier company's common stock for $405,000 in cash. At the acquisition date, the book values and fair values of Eraizer's assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 10 percent of the total book value of Fraizer The stockholders' equity accounts of the two companies at acquisition date are: Common Stock ($5 par value) Additional Paid in Capital Retained Earnings Total Stockholders' Equity REDDING $500,000 320,000 400,000 . $1,220,000 FRAZIER $200,000 100,000 150,000 $450,000 NCI was assigned $20,000 in Redding's consolidated income statement for 2020. Beddings net income from its own operations (excluding investment income) is $750,000 for the year 2020. Frazier declared $18,000 in cash dividends. Required a. What is the balance in the investment in Frazier account on the books of Redding on December 31, 2020? b. Present the consolidation journal entry needed to prepare the December 31, 2020 consolidated financial statements.

Answer rating: 100% (QA)

Consideration Paid For 90 of Frezzers Share 405000 Fair Value of Non C... View the full answer