Items 1 and 2 are based on the following:
On January 1, 2006, Ritt Corp. purchased 80% of Shaw Corp.’s $10 par common stock for $975,000. On this date, the carrying amount of Shaw’s net assets was $1,000,000. The fair values of Shaw’s identifiable assets and liabilities were the same as their carrying amounts except for plant assets (net) that were $100,000 in excess of the carrying amount. For the year ended December 31, 2006, Shaw had net income of $190,000 and paid cash dividends totaling $125,000.
In the January 1, 2006 consolidated balance sheet, goodwill should be reported at
- $0
- $ 75,000
- $ 95,000
- $175,000
In the December 31, 2006 consolidated balance sheet, minority interest should be reported at
- $200,000
- $213,000
- $220,000
- $233,000