On January 1,20X8,Zeta Company acquired 85 percent of Theta Company's common stock for $100,000 cash.The fair value of the noncontrolling interest was determined to be 15 percent of the book value of Theta at that date.What portion of the retained earnings reported in the consolidated balance sheet prepared immediately after the business combination is assigned to the noncontrolling interest?
A) None
B) 15 percent
C) 100 percent
D) Cannot be determined

Question

Quizplus · Accepted Answer

In a business combination, the retained earnings of the subsidiary are not assigned to the noncontrolling interest in the consolidated balance sheet. Only the subsidiary's net assets and any goodwill are considered.

On January 1,20X8,Zeta Company Acquired 85 Percent of Theta Company's