USA: +1 725-224-8795 
Sign in
In 2006, A acquired a 100% equity interest in B for cash
consideration of $125,000. B’s identifiable net assets at fair value
were $100,000. Goodwill of $5,000 was identified and recognized.
In the subsequent years, B increased net assets by $20,000 to
$120,000. This is reflected in equity attributable to the parent.
A then disposed of 30% of its equity interest to non- controlling
interests for $40,000.
Required:
Calculate the increase or decrease to be recorded in equity.
Don't use plagiarized sources. Get Your Custom Essay on
Question & Answer: In 2006, A acquired a 100% equity interest in B for cash…..
GET AN ESSAY WRITTEN FOR YOU FROM AS LOW AS $13/PAGE
Expert Answer
the increase or decrease to be recorded in equity:
| Acquisition price paid for B | $125000 |
| Less: Goodwill identified | – $5000 |
| Value of 100% equity acquired | $120000 |
| Less: Non-controlling interest (30%) | $40000 |
| Value of 70% of the Equity acquired | $80000 |
| Less: Fair value of the 70% of equity ($100000 * 70%) | -$70000 |
| Increase in the equity of 70% of equity | $10000 |
