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Harman [31]
3 years ago
10

Scissor Corporation holds assets with a fair value of $150,000 and a book value of $125,000 and liabilities with a book value an

d fair value of $50,000. What balance will be assigned to the noncontrolling interest in the consolidated balance sheet if Paper Company pays $90,000 to acquire 75 percent ownership in Scissor and goodwill of $20,000 is reported
Business
1 answer:
slava [35]3 years ago
3 0

Answer:

$30,000

Explanation:

According to the scenario, computation of the given data are as follow:-

We can calculate the non-controlling interest by using following formula:-

Equity’s Fair Value = Assets Fair Value - Liabilities Fair Value

= $150,000 - $50,000

= $100,000

Paper pays $75,000 for 75% equity and $15,000 for acquire 75% of goodwill.

Non Controlling Interest (In Consolidated Balance Sheet)

=100% - 75% × ( Equity’s Fair Value + Goodwill)

= 25% × ($100,000+$20,000)

= 0.25 × $120,000

= $30,000

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Compute the requested value. Choose the correct answer.
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