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Parent Inc Assuming That Parent Inc Acquires 80% of Sub Inc on on July

question 28

Multiple Choice

Parent Inc. and Sub Inc. had the following balance sheets on July 31, 2019: $\begin{array}{|l|r|r|r|}\hline & \text { Parent Inc } & \text { Sub Inc } & \text { Sub Inc } \\\hline & \text { (caryying value) } & \begin{array}{r}\text { (carrying } \\\text { value) }\end{array} & \text { (fair value) } \\\hline \text { Cash } & \$ 180,000 & \$ 36,000 & \$ 36,000 \\\hline \text { Accounts Receivable } & \$ 100,000 & \$ 40,000 & \$ 40,000 \\\hline \text { Inventory } & \$ 60,000 & \$ 24,000 & \$ 27,000 \\\hline \text { Plant and Equipment (net) } & \$ 200,000 & \$ 80,000 & \$ 93,000 \\\hline \text { Goodwill } & \$- & \$ 8,000 & \\\hline \text { Trademark } & \$- & \$ 12,000 & \$ 15,000 \\\hline \text { Total Assets } & \$ \mathbf{5 4 0 , 0 0 0} & \$ 200,000 & \\\hline \text { Current Liabilities } & \$ 80,000 & \$ 50,000 & \$ 50,000 \\\hline \text { Bonds Payable } & \$ 320,000 & \$ 20,000 & \$ 24,000 \\\hline \text { Common Shares } & \$ 90,000 & \$ 80,000 \\\hline \text { Retained Earnings } & \$ 50,000 & \$ 50,000 \\\hline \text { Total Liabilities and Equity } & \$ 540,000 & \$ 200,000 \\\hline\end{array}$ Assuming that Parent Inc acquires 80% of Sub Inc on August 1, 2019 for cash of $180,000, what amount would appear in the Non-Controlling Interest (NCI) Account on the Consolidated Balance Sheet if the fair value enterprise (FVE) method were used?

Definitions:

Wastewater

Water that has been used and contaminated by human activity, which includes residential, industrial, and commercial waste liquids.

Dissolved Salts

Ionic substances that are broken down into constituent ions in a solution, primarily found in bodies of water.

Brackish Water

Water that has more salt than freshwater but less than seawater, often resulting from the mixing of sea and freshwater.

Waterless Conditions

Environments or situations characterized by a lack of water or moisture.