On January 1,20X6,Pumpkin Corporation Acquired 70 Percent of Spice Company's

question 25

Multiple Choice

On January 1,20X6,Pumpkin Corporation acquired 70 percent of Spice Company's common stock for $210,000 cash.The fair value of the noncontrolling interest at that date was determined to be $90,000.Data from the balance sheets of the two companies included the following amounts as of the date of acquisition:
At the date of the business combination,the book values of Spice's assets and liabilities approximated fair value except for inventory,which had a fair value of $30,000,and land,which had a fair value of $95,000.
-Based on the preceding information,what amount will be reported as noncontrolling interest in the consolidated balance sheet prepared immediately after the business combination?

• A)$0
• B)$81,000
• C)$90,000
• D)$96,000

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Definitions:

Percentage Form

A way of expressing numbers as a fraction of 100, symbolized by the percent sign (%).

Sticker Price

The full retail price of a vehicle, as displayed on a sticker in the car's window; commonly used to refer to the initial asking price of goods.

GST

The Goods and Services Tax is a form of value-added tax applied to almost all goods and services purchased for use within the nation.

PST

Provincial Sales Tax; a tax levied by certain provinces in Canada on the sale of goods and services.