On January 1, 20X9, Pallet Company acquires 80 percent ownership in Slat Corporation for $200,000. The fair value of the noncontrolling interest at that time is determined to be $50,000. Slat reports net assets with a book value of $250,000 and fair value of $250,000. Pallet Company reports net assets with a book value of $600,000 and a fair value of $650,000 at that time, excluding its investment in Slat. What will be the amount of consolidated net assets that would be reported immediately after the combination?

Question

Business

Jaylen Calhoun

10 August, 22:16

On January 1, 20X9, Pallet Company acquires 80 percent ownership in Slat Corporation for $200,000. The fair value of the noncontrolling interest at that time is determined to be $50,000. Slat reports net assets with a book value of $250,000 and fair value of $250,000. Pallet Company reports net assets with a book value of $600,000 and a fair value of $650,000 at that time, excluding its investment in Slat. What will be the amount of consolidated net assets that would be reported immediately after the combination?

+5

Answers (1)

Know the Answer?

Dario Shelton · Answer 1

Consolidated Assets 850,000

Explanation:

We need to calcualte the alue of the purchased portion of Slat.

total assets - non-controlled = proportional owned assets

250,000 - 50,000 = 200,000

The consolidated net assets would be:

Pallet Company 650,000

Slat Company 250,000

non-controlling (50,000)

Consolidated Assets 850,000