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

question 2

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.
$$\begin{array} { | l | r | r | r | } \hline & \begin{array} { c } \text { January 1, } \\20X 7\end{array} & \begin{array} { c } \text { January 1, } \\20X9\end{array} & \begin{array} { c } \text { December 31, } \\20X10\end{array} \\\hline \text { Net carrying value of buildings } & \$ 3,560,000 & 3,320,000 & 3,320,000 \\\hline \text { Fair value of the buildings } & \$ 4,760,000 & 4,804,000 & 4,804,000 \\\hline \begin{array} { l } \text { Remaining useful life of } \\\text { buildings }\end{array} & 30 & 28 & 27 \\\hline \text { Common shares } & \$ 1,000,000 & \$ 1,000,000 & \$ 1,000,000 \\\hline \text { Retained earnings } & \$ 1,500,000 & 1,820,000 & 2,200,000 \\\hline\end{array}$$ 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 the 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.

---

Definitions:

Range

The difference between the highest and lowest scores in a set of data, indicating the spread or variability of the dataset.

Distribution

In business, refers to the process of making a product or service available to the consumer or business user who needs it. In statistics, it describes the way in which values in a dataset are spread out.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values from the mean.

Squared Deviation

A statistical measure showing the dispersion of data points. It represents the square of the difference between an observed value and the mean of the dataset.