On January 1, 2013, Nichols Company Acquired 80% of Smith

question 88

Multiple Choice

On January 1, 2013, 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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Definitions:

Motorcycle Seats

Components of a motorcycle designed to provide a rider and possibly a passenger with a comfortable place to sit while riding.

Supply Partnership

A collaborative agreement between a supplier and a buyer to ensure products or services are available at the right time, quality, and price.

Mutually Beneficial Objectives

Goals or intentions that provide advantages or positive outcomes for all parties involved in a particular situation or agreement.

Policies

Formal guidelines or rules set by an organization to regulate and guide decisions and actions in various scenarios.