On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by purchasing 40,000 shares of Siena's common stock. There was no differential related to this transaction. The noncontrolling interest had a fair value equal to 20 percent of book value. The book value of Siena on December 31, 20X7 was as follows: On January 1, 20X8, Siena sold an additional 12,500 shares to a nonaffiliate for $25 per share.
Based on the preceding information, what is Pisa's new ownership interest?

Question

On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by purchasing 40,000 shares of Siena's common stock. There was no differential related to this transaction. The noncontrolling interest had a fair value equal to 20 percent of book value. The book value of Siena on December 31, 20X7 was as follows:  On January 1, 20X8, Siena sold an additional 12,500 shares to a nonaffiliate for $25 per share.
Based on the preceding information, what is Pisa's new ownership interest?

Quizplus · Accepted Answer

The Answer of On January 1, 20X7, Pisa Company acquired 80 percent of Siena Company by purchasing 40,000 shares of Siena's common stock. There was no differential related to this transaction. The noncontrolling interest had a fair value equal to 20 percent of book value. The book value of Siena on December 31, 20X7 was as follows:  On January 1, 20X8, Siena sold an additional 12,500 shares to a nonaffiliate for $25 per share.
Based on the preceding information, what is Pisa's new ownership interest?

On January 1, 20X7, Pisa Company Acquired 80 Percent of Siena