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Current assets Plant & equipment, net Intangibles Liabilities Capital stock Retained earnings, January 1 Acumulated other comprehensive income, January 1 Dividends Sales revenue Cost of goods sold Operating expenses Other comprehensive income Dr (Cr) $28,200,000 188,000,000 2,000,000 (180,000,000) (1,000,000) (29,500,000) (500,000) 400,000 (24,000,000) 10,000,000 6,500,000 (100,000) $0 On January 1, 2018, Pomegranate Company acquired 90% of the voting stock of Starfruit Company for $91,700,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $6,300,000. Starfruit's book value was $13,000,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10- year life, straight-line) was overvalued by $25,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $40,000,000 and 5-year life, straight-line, which were capitalized following GAAP. If Pomegranate follows IFRS and uses the alternative method of valuing the noncontrolling interest, at the date of acquisition the noncontrolling interest in Starfruit appears in the equity section of the consolidated balance sheet in the amount of O $7,800,000 O$6,300,000 O $2,800,000 O$1,300,000 On January 1, 2018, Pomegranate Company acquired 90% of the voting stock of Starfruit Company for $91,700,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $6,300,000. Starfruit's book value was $13,000,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10- year life, straight-line) was overvalued by $25,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $40,000,000 and 5-year life, straight-line, which were capitalized following GAAP. If Pomegranate follows IFRS and uses the alternative method of valuing the noncontrolling interest, the 2020 noncontrolling interest in comprehensive income of Starfruit is O$185,000 O$300,000 O $210,000 O $200,000 On January 1, 2018, Pomegranate Company acquired 90% of the voting stock of Starfruit Company for $91,700,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $6,300,000. Starfruit's book value was $13,000,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10- year life, straight-line) was overvalued by $25,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $40,000,000 and 5-year life, straight-line, which were capitalized following GAAP. Now assume Pomegranate paid only $20,000,000 to acquire 90% of Starfruit. The fair value of the noncontrolling interest at the date of acquisition was $2,000,000. At the date of acquisition, consolidation eliminating entry (R) credits the noncontrolling interest in Starfruit in the amount of O $6,700,000 O $4,900,000 O$2,000,000 O$ 700,000 Current assets Plant & equipment, net Intangibles Liabilities Capital stock Retained earnings, January 1 Acumulated other comprehensive income, January 1 Dividends Sales revenue Cost of goods sold Operating expenses Other comprehensive income Dr (Cr) $28,200,000 188,000,000 2,000,000 (180,000,000) (1,000,000) (29,500,000) (500,000) 400,000 (24,000,000) 10,000,000 6,500,000 (100,000) $0 On January 1, 2018, Pomegranate Company acquired 90% of the voting stock of Starfruit Company for $91,700,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $6,300,000. Starfruit's book value was $13,000,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10- year life, straight-line) was overvalued by $25,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $40,000,000 and 5-year life, straight-line, which were capitalized following GAAP. If Pomegranate follows IFRS and uses the alternative method of valuing the noncontrolling interest, at the date of acquisition the noncontrolling interest in Starfruit appears in the equity section of the consolidated balance sheet in the amount of O $7,800,000 O$6,300,000 O $2,800,000 O$1,300,000 On January 1, 2018, Pomegranate Company acquired 90% of the voting stock of Starfruit Company for $91,700,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $6,300,000. Starfruit's book value was $13,000,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10- year life, straight-line) was overvalued by $25,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $40,000,000 and 5-year life, straight-line, which were capitalized following GAAP. If Pomegranate follows IFRS and uses the alternative method of valuing the noncontrolling interest, the 2020 noncontrolling interest in comprehensive income of Starfruit is O$185,000 O$300,000 O $210,000 O $200,000 On January 1, 2018, Pomegranate Company acquired 90% of the voting stock of Starfruit Company for $91,700,000 in cash. The fair value of the noncontrolling interest in Starfruit at the date of acquisition was $6,300,000. Starfruit's book value was $13,000,000 at the date of acquisition. Starfruit's assets and liabilities were reported on its books at values approximating fair value, except its plant and equipment (10- year life, straight-line) was overvalued by $25,000,000. Starfruit Company had previously unreported intangible assets, with a market value of $40,000,000 and 5-year life, straight-line, which were capitalized following GAAP. Now assume Pomegranate paid only $20,000,000 to acquire 90% of Starfruit. The fair value of the noncontrolling interest at the date of acquisition was $2,000,000. At the date of acquisition, consolidation eliminating entry (R) credits the noncontrolling interest in Starfruit in the amount of O $6,700,000 O $4,900,000 O$2,000,000 O$ 700,000

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