The Following Balances Were Taken from the Records of S

question 27

Essay

The following balances were taken from the records of S Company: P Company purchased 75% of S Company's common stock on January 1, 2014 for $900,000. The difference between implied value and book value is attributable to assets with a remaining useful life on January 1, 2016 of ten years.
Required:
A. Compute the difference between cost/(implied) and book value applying:
1. Parent company theory.
2. Economic unit theory.
B. Assuming the economic unit theory:
1. Compute noncontrolling interest in consolidated income for 2016.
2. Compute noncontrolling interest in net assets on December 31, 2016.

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Definitions:

NEMA Design

Refers to standards set by the National Electrical Manufacturers Association for various types of electrical equipment, including motors.

Operating Characteristics

The specific features or parameters that define the performance of a system or device under specific conditions.

Inverter

An electronic device that converts direct current (DC) into alternating current (AC), used in a variety of applications including power supplies and motor drives.

DC Bus

A type of electrical bus, which serves as a common connection point for direct current (DC) power within a power distribution system.