Use the following information to answer Questions bellow.
On January 1, 2020, PC Power Company, a company located in Singapore, acquired 75% of Sandisk Company's voting stock for S$25,000 in cash. Indefinite life identifiable intangible assets not previously reported on Sandisk's balance sheet had a fair value of S$8,000. There were no other date-of-acquisition revaluations of Sandisk's identifiable net assets. Sandisk's book value at January 1, 2020 was S$3,000.
It is now December 31, 2021 (two years later). There is no goodwill impairment in 2020, and goodwill impairment for 2021 is S$300. The previously unreported identifiable intangible assets were impaired by S$200 in 2020 and S$100 in 2021. PC Power uses the complete equity method to account for its investment, and follows IFRS, using the alternative method for valuing noncontrolling interests and goodwill. December 31, 2017 trial balances for PC Power and Sandisk appear bellow.
$$\begin{array} { | l | r | r | }
\hline & \begin{array} { c }
\text { PC Power } \
\text { Dr (Cr) }
\end{array} & \begin{array} { c }
\text { Sandisk } \
\text { Dr (Cr) }
\end{array} \
\hline \text { Tangible assets, net } & \text { S\$ 46,000 } & \text { S\$ } 30,500 \
\hline \text { Irwestment in Sandisk } & 26,725 & - \
\hline \text { Liabilities } & \{ 35,350 \} & \{ 24,500 \} \
\hline \text { Capital stock } & \{ 15,000 \} & \{ 1,000 \} \
\hline \text { Retained earnings, beginning } & \{ 21,000 \} & \{ 4,000 \} \
\hline \text { Sales revenue } & \{ 25,000 \} & \{ 13,500 \} \
\hline \text { Equity in net income of Sandisk } & \{ 375 \} & - \
\hline \text { Cost of sales and operating expenses } & \underline { 24,000 } & \underline { 12,500 } \
\hline \text { Total } &\underline { \underline { \mathbf { S\$ } \quad 0 }}& \underline { \underline { \mathbf { S\$ } \quad 0 }}\
\hline
\end{array}$$
-On the consolidation working paper for 2021, what is the credit to the noncontrolling interest for eliminating entry (R)?

Question

Use the following information to answer Questions bellow.
On January 1, 2020, PC Power Company, a company located in Singapore, acquired 75% of Sandisk Company's voting stock for S$25,000 in cash. Indefinite life identifiable intangible assets not previously reported on Sandisk's balance sheet had a fair value of S$8,000. There were no other date-of-acquisition revaluations of Sandisk's identifiable net assets. Sandisk's book value at January 1, 2020 was S$3,000.
It is now December 31, 2021 (two years later). There is no goodwill impairment in 2020, and goodwill impairment for 2021 is S$300. The previously unreported identifiable intangible assets were impaired by S$200 in 2020 and S$100 in 2021. PC Power uses the complete equity method to account for its investment, and follows IFRS, using the alternative method for valuing noncontrolling interests and goodwill. December 31, 2017 trial balances for PC Power and Sandisk appear bellow.
 $$\begin{array} { | l | r | r | } 
\hline & \begin{array} { c } 
\text { PC Power } \
\text { Dr (Cr) }
\end{array} & \begin{array} { c } 
\text { Sandisk } \
\text { Dr (Cr) }
\end{array} \
\hline \text { Tangible assets, net } & \text { S\$ 46,000 } & \text { S\$ } 30,500 \
\hline \text { Irwestment in Sandisk } & 26,725 & - \
\hline \text { Liabilities } & \{ 35,350 \} & \{ 24,500 \} \
\hline \text { Capital stock } & \{ 15,000 \} & \{ 1,000 \} \
\hline \text { Retained earnings, beginning } & \{ 21,000 \} & \{ 4,000 \} \
\hline \text { Sales revenue } & \{ 25,000 \} & \{ 13,500 \} \
\hline \text { Equity in net income of Sandisk } & \{ 375 \} & - \
\hline \text { Cost of sales and operating expenses } & \underline { 24,000 } & \underline { 12,500 } \
\hline \text { Total } &\underline { \underline { \mathbf { S\$ } \quad 0 }}& \underline { \underline { \mathbf { S\$ } \quad 0 }}\
\hline
\end{array}$$
-On the consolidation working paper for 2021, what is the credit to the noncontrolling interest for eliminating entry (R)?

Quizplus · Accepted Answer

The credit to the noncontrolling interest for eliminating entry (R) is calculated based on the noncontrolling interest's share of Sandisk's net income and adjustments. The noncontrolling interest is 25% (100% - 75% owned by PC Power). The net income of Sandisk is S$1,000 (S$13,500 - S$12,500). The impairment adjustments for intangible assets are S$100 for 2021. Therefore, the noncontrolling interest share is 25% of (S$1,000 - S$100) = S$225. Adding the beginning noncontrolling interest balance of S$1,725 (25% of S$6,900, which is Sandisk's equity at acquisition plus post-acquisition retained earnings), the total credit is S$1,950.

Use the Following Information to Answer Questions Bellow -On the Consolidation Working Paper for 2021, What Is the 1