Balance Sheet
7. Assume that P company purchases 60% of the outstanding shares of S company for $300 cash and that all of S company’s assets and liabilities are carried on S’s books at market value. Below find the balance sheets for the two companies, immediately before the purchase occurs.
P Company S Company
Assets $3,000 $2,000
Liabilities $1,000 $1,500
Shareholders’ Equity $2,000 $ 500
7a. Compute non-controlling interest that will appear on P Company’s consolidated balance sheet immediately after the merger. Show your computations? (5 points)
Non-controlling interest: | Computations: |
In the quarter following the purchase, P company’s consolidated income statement ends in the following way:
Net Income: $200
Net Income Attributable to noncontrolling interests: +10
Net Income Attributable to P Company: $210
7b. What was the total profit or loss of S company for the quarter? Show your computations? (5 points)
Circle One: Profit Loss Amount: | Computations: |
7c. How much of S’s income is included in the $210 “Net Income Attributable to P Company”? Show your computations. (5 points)
Circle One: Profit Loss Amount: | Computations: |