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,Pisa purchased an additional 12,500 shares directly from Siena for $25 per share.

-By what amount did the Investment in Siena account change?

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,Pisa purchased an additional 12,500 shares directly from Siena for $25 per share.
 
-By what amount did the Investment in Siena account change?

Quizplus · Accepted Answer

The Investment in Siena account increased by $296,500 because the beginning balance was $148,250 and the ending balance was $444,750.

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