On January 1, 2009, Nichols Company Acquired 80% of Smith

question 98

Multiple Choice

On January 1, 2009, Nichols Company acquired 80% of Smith Company's common stock and 40% of its non-voting, cumulative preferred stock. The consideration transferred by Nichols was $1,200,000 for the common and $124,000 for the preferred. Any excess acquisition-date fair value over book value is considered goodwill. The capital structure of Smith immediately prior to the acquisition is:

Compute the non-controlling interest in Smith at date of acquisition.

• A) $486,000.
• B) $480,000.
• C) $300,000.
• D) $150,000.
• E) $120,000.

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