The Following Information Applies to Questions 21-26

question 9

Multiple Choice

The following information applies to Questions 21-26
On December 31, 20X8, X Company acquired controlling ownership of Y Company. A consolidated balance sheet was prepared immediately. Partial balance sheet data for the two companies and the consolidated entity at that date follow:
During 20X8, X Company provided consulting services to Y Company and has not yet paid for them. There were no other receivables or payables between the companies at December 31, 20X8.

-Rohan Corporation holds assets with a fair value of $150,000 and a book value of $125,000 and liabilities with a book value and fair value of $50,000.What balance will be assigned to the noncontrolling interest in the consolidated balance sheet if Helms Company pays $90,000 to acquire 75 percent ownership in Rohan and goodwill of $20,000 is reported?

• A) $50,000
• B) $30,000
• C) $40,000
• D) $20,000

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Definitions:

Payable

Amounts owed by a company to its creditors or suppliers that are due to be paid within the near future.

Inventory On Credit

A business practice where goods are acquired without immediate payment, with the understanding that payment will be made at a later date.

Receivables Balance

The total amount of money owed to a company for goods or services delivered or used but not yet paid for by customers.

Average Daily Sales

The average sales generated per day over a specific period, useful for analyzing business performance.