On January 1,20X7,Water Limited Purchased 700,000 Shares of Bottle Inc

question 3

Essay

On January 1,20X7,Water Limited purchased 700,000 shares of Bottle Inc.for $2.8 million.On January 1,20X9,Water purchased another 200,000 shares of Bottle for $950,000.During the entire period Bottle had 1,000,000 shares outstanding.Water accounts for its investment in Bottle under the equity method.The following information was extracted from the financial records of Bottle:

All net identifiable assets had a fair value equal to their carrying value on the date of acquisition except the buildings.There is no goodwill reported on the separate entity financial statements of Water or Bottle.There have been no intercompany transactions between Water and Bottle.
Required:
Calculate the balances of following accounts on the consolidated statement of financial position at December 31,20X10,under the entity method:
a.Goodwill
b.NCI
Determine the adjustment to equity required for the second acquisition.

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Definitions:

Hammer (Malleus)

A bone in the middle ear that transmits sound vibrations from the eardrum to the other ossicles.

Stirrup (Stapes)

A small bone in the middle ear that is involved in transmitting sound vibrations to the inner ear.

Taste Receptors

Specialized sensory cells located on the tongue that enable the perception of taste, including sweet, sour, salty, bitter, and umami.

Papillae

Small, nipple-like structures on the tongue where taste buds are located, responsible for the perception of taste.