Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 11) on january 2, parma borrowed $60,000 and used

11) On January 2, Parma borrowed $60,000 and used the proceeds to purchase 90% of...

80.2K

Verified Solution

Question

Accounting

11) On January 2, Parma borrowed $60,000 and used the proceeds to purchase 90% of the outstanding common shares of Seville. Parma had no prior equity interest in Seville. Ten equal principal and interest payments begin December 30. The excess of the implied fair value of Seville over the carrying amount of its identifiable net assets, if any, should be assigned 60% to inventory and 40% to goodwill. Moreover, the fair value of the non- controlling interest (NCI) is 10% of the implied fair value of the acquiree.

The following are the balance sheets of Parma and Sevlle on Jan. 1

Parma Sevlle

Current assets $70,000 $20,000

Noncurrent assets 90,000 40,000

Total assets 160,000 $60,000

Current liabilities 30,000 10,000

Noncurrent liabilities 50,000 ------

Equity 80,000 50,000

Total liabilities and equity 160,000 $60,000

On Parmas January 2 consolidated balance sheet, parmas equity should be ? ( Please show work)

  1. $80,000
  2. $86,667
  3. $90,000
  4. $130,000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

"Efficient Market Hypothesis (EMH)" Please respond to the following: The book discusses the Efficient Market Hypothesis (EMH)...

Finance
Q

Explain the two opposing forces --- cost reduction and adaptation to local markets --- that firms...

Operations Management
Q

A water sample contains 1.00*10-4 mass% silver nitrate. Silver chloride's solubility product is Ksp(AgCl) = 1.82*10-10 a) How...

Chemistry
Q

answer the following regarding DNA repair mechanisms What is \"direct repair\"? Give a couple of examples of...

Biology
Q

An epedemic is spreading form human to human. A hospital counts on the start of the...

Mechanical Engineering
Q

Find y as a function of t if 100y???9y=0100y??9y=0 with y(0)=3,y?(0)=8.

Advance Math
Q

(c) Suppose two team members refuse to work together on projects. How many groups of...

Basic Math
Q

Under which of the following circumstances would a disclaimer of opinion be appropriate? (A) The...

Accounting
Q

This is the data from the first question in my previous upload recently Pulse...

Accounting
Q

help how to solve World Defense manufactures radar systems. It has just completed...

Accounting
Q

Andretti Company has a single product called a Dak. The company normally produces and sells...

Accounting
Q

Score: 0 of 2 pts 12 of 12 (10 complete) HW Score: 65.22%, 12.39 of...

Accounting