Computations (parent company and entity theories)
Balance sheet information of Pod and Sad Corporations at December 31, 2011, is summarized as follows (in thousands):
|
Pod Book Value |
Sad Book Value |
Sad Fair Value |
|
|
Current assets |
$ 520 |
$ 50 |
$ 90 |
|
Plant assets—net |
480 |
250 |
360 |
|
$1,000 |
$300 |
$450 |
|
|
Current liabilities |
$ 80 |
$ 40 |
$ 50 |
|
Capital stock |
800 |
200 |
|
|
Retained earnings |
120 |
60 |
|
|
$1,000 |
$300 |
On January 2, 2011, Pod purchases 80 percent of Sad’s outstanding shares for $500,000 cash.
REQUIRED
1. Determine goodwill from the acquisition under (a) parent company theory and (b) entity theory.
2. Determine noncontrolling interest at January 2, 2011, under (a) parent company theory and (b) entity theory.
3. Determine the amount of total assets that would appear on a consolidated balance sheet prepared at January 2, 2011, under (a) parent company theory and (b) entity theory.