accounting-Python acquires 80% of the voting stock of Slither on January 1, 2017 for $1,500,000.

by | Aug 20, 2025 | Business

Python acquires 80% of the voting stock of Slither on January 1, 2017 for $1,500,000. The fair value of the noncontrolling interest is $350,000. Slither’s balance sheet at the date of acquisition is as follows:

Book Value

Dr (Cr)

Fair Value

Dr (Cr)

Tangible assets

$5,000,000

$3,500,000

Identifiable intangibles

–

2,000,000

Liabilities

(3,000,000)

(3,000,000)

Capital stock

(500,000)

–

Retained earnings

(1,400,000)

–

Accumulated other comprehensive income

(100,000)

On the consolidation working paper at January 1, 2017, what is the credit to noncontrolling interest in equity for eliminating entry (E)?

(Points : 4)

$400,000

$100,000

$300,000

$-0-

Python acquires 80% of the voting stock of Slither on January 1, 2017 for $1,500,000. The fair value of the noncontrolling interest is $350,000. Slither’s balance sheet at the date of acquisition is as follows:

Book Value

Dr (Cr)

Fair Value

Dr (Cr)

Tangible assets

$5,000,000

$3,500,000

Identifiable intangibles

–

2,000,000

Liabilities

(3,000,000)

(3,000,000)

Capital stock

(500,000)

–

Retained earnings

(1,400,000)

–

Accumulated other comprehensive income

(100,000)

On the consolidation working paper at January 1, 2017, what is the credit to Investment in Slither for eliminating entry (R)?

(Points : 4)

$700,000

$400,000

$550,000

$-0-

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