On December 31,20X6,the Statements of Financial Position of the Power

question 33

Essay

On December 31,20X6,the statements of financial position of the Power Company and the Pro Company are as follows (amounts in thousands):
Power Company has 100,000 shares of common stock outstanding.Pro Company has 45,000 shares outstanding.All assets and liabilities have book value equal to fair values,except as noted above.
The plant and equipment has an estimated remaining useful life of nine years from the date of acquisition.The long term liabilities mature on December 31,2010.Market value of the new shares issued was $90 per share at issuance.
Required:
Assume that 90% of the outstanding shares of Pro were acquired for cash of $8.1 million.Calculate goodwill and the non-controlling interest on the consolidated balance sheet at December 31,20X6 under the entity method and the parent-company extension method.Explain the differences between the two balances for goodwill.

Identify the distinction between positive and normative statements and their roles in economics.

Recognize the economizing problem as a fundamental economic issue.

Understand the assumptions and limitations of economic models and theories.

Explain the implications of scarcity on economic decisions and society.

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