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

Question

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

Quizplus · Accepted Answer

Noncontrolling interest is the portion of the equity of a subsidiary not attributable to the parent company. In this case, Pumpkin Corporation acquired 70% of Spice Company's common stock, so the remaining 30% is the noncontrolling interest. The fair value of the noncontrolling interest at the date of acquisition was determined to be $90,000. Therefore, the amount reported as noncontrolling interest in the consolidated balance sheet prepared immediately after the business combination is $90,000.

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