On January 1,2014,Parton Corporation Acquired an 80% Interest in Sandra

question 3

Essay

On January 1,2014,Parton Corporation acquired an 80% interest in Sandra Corporation for $184,000.Sandra's net assets on this date had a book value of $160,000 and a fair value of $210,000.The excess of fair value over book value at acquisition was attributable to $20,000 of understated plant assets with a remaining useful life of five years from January 1,2014,and $30,000 to an understated patent with a remaining economic life of six years from January 1,2014.Separate net incomes (excluding investment income)of Parton and Sandra for 2014 were $300,000 and $50,000,respectively.
Required:
1.Compute goodwill at January 1,2014 under the parent company theory and the entity theory.
2.Determine consolidated net income and noncontrolling interest share for 2014 under the parent company theory and the entity theory.

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Definitions:

Plant Cell

The basic structural, functional, and biological unit of plants, distinguished by containing a cell wall, chloroplasts, and a large central vacuole.

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The measure of how acidic or basic a given environment is, influencing many ecological and biological processes.

Enzyme Activity

The rate at which an enzyme catalyzes its specific biochemical reaction, converting substrates into products.

Receptor-Mediated Endocytosis

A cellular process by which cells absorb external substances through the inward folding of their plasma membrane, allowing specific molecules to enter the cell via receptors.