REFERENCE: Ref.05_13 Several Years Ago Polar Inc.purchased an 80% Interest in Icecap

question 38

Essay

REFERENCE: Ref.05_13
Several years ago Polar Inc.purchased an 80% interest in Icecap Co.The book values of Icecap's asset and liability accounts at that time were considered to be equal to their fair values.Polar paid an amount corresponding to the underlying book value of Icecap so that no allocations or goodwill resulted from the purchase price.
The following selected account balances were from the individual financial records of these two companies as of December 31,2009:
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-Polar sold a building to Icecap on January 1,2008 for $112,000,although the book value of this asset was only $70,000 on that date.The building had a five-year remaining useful life and was to be depreciated using the straight-line method with no salvage value.
Required:
On the consolidated financial statements for 2009,determine the balances that would appear for the following accounts: (1)Buildings (net), (2)Operating expenses,and (3)Noncontrolling Interest in Subsidiary's Net Income.

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Definitions:

Seller

An individual or entity that offers goods or services for sale to consumers or other businesses.

Express Warranty

A seller's explicit promise or guarantee about the condition or quality of a product.

Mechanic

A skilled worker specialized in constructing, repairing, or maintaining machinery, vehicles, or other technical systems.

Brakes

Devices used to slow down or stop a vehicle by applying pressure against a moving part to create friction.