#### Details of this Paper

##### ACC - Nichols Company

Description

solution

Question

Question;On January 1, 2009, Nichols Company acquired 80% of Smith;Company's common stock and 40% of its non-voting, cumulative preferred stock.;The consideration transferred by Nichols was \$1,200,000 for the common and;\$124,000 for the preferred. Any excess acquisition-date fair value over book;value is considered goodwill. The capital structure of Smith immediately prior;to the acquisition is;Common Stock, \$10 par value (50,000 shares outstanding) =;500,000;Preferred Stock, 6% cumulative, \$100 par (3,000 shares;outstanding) = 300,000;Additional Paid-In Capital = 200,000;Retained Earnings = 500,000;Total Stockholders Equity = 1,500,000;(A) Compute the goodwill recognized in consolidation (the;answer is \$310,000);(B) Computer the non-controlling interest in Smith at the;date of acquisition;(the answer is 486,000);(C) If Smith's net income is \$100,000 in the year following;the acquisition, what is the non-controlling interest balance (the answer is;27,000);Please show every step of calculations

Paper#40546 | Written in 18-Jul-2015

Price : \$19