On January 3,2009,Redding Company acquired 80 percent of Frazer Corporation's common stock for $344,000 in cash.At the acquisition date,the book values and fair values of Frazer's assets and liabilities were equal,and the fair value of the noncontrolling interest was equal to 20 percent of the total book value of Frazer.The stockholders' equity accounts of the two companies at the acquisition date are:
Noncontrolling interest was assigned income of $11,000 in Redding's consolidated income statement for 2009.

-Based on the preceding information,what amount will be assigned to the noncontrolling interest on January 3,2009,in the consolidated balance sheet?
A)$86,000
B)$44,000
C)$68,800
D)$50,000

Question

On January 3,2009,Redding Company acquired 80 percent of Frazer Corporation's common stock for $344,000 in cash.At the acquisition date,the book values and fair values of Frazer's assets and liabilities were equal,and the fair value of the noncontrolling interest was equal to 20 percent of the total book value of Frazer.The stockholders' equity accounts of the two companies at the acquisition date are:
Noncontrolling interest was assigned income of $11,000 in Redding's consolidated income statement for 2009.
 
-Based on the preceding information,what amount will be assigned to the noncontrolling interest on January 3,2009,in the consolidated balance sheet?
A)$86,000 
B)$44,000 
C)$68,800 
D)$50,000

Quizplus · Accepted Answer

The noncontrolling interest is assigned the amount of the subsidiary's net assets multiplied by the noncontrolling interest percentage. In this case, the subsidiary's net assets are $172,000 and the noncontrolling interest percentage is 50%. Therefore, the noncontrolling interest is assigned $86,000 (172,000 * 50%).

On January 3,2009,Redding Company Acquired 80 Percent of Frazer Corporation's