Please help with the answers Thanks Large Company owns 60 percent of the outstan

Question

Please help with the answers Thanks

Large Company owns 60 percent of the outstanding shares of Tiny. During the current year, Large sold inventory costing S90,000 to Tiny for $100,000. Although this inventory has now been sold to an outside party, Tiny has not yet paid Large. At the balance sheet date, Large has total current assets of S600,000 whereas Tiny has total current assets of $400,000. Assume that there were no allocations established at the date of acquisition. What is the total amount reported on the consolidated balance sheet for current assets? Question 1 options A) 740,000 B) $780,000 C) S900,000 D) $940,000 Question 2 (7 points) Jumb is the basis to be used for recording the assets and liabilities of Mini within Jumbo's consolidated financial statements? o company acquires all of the stock of Mini company. According to US GAAP, what Question 2 options A) The fair value of the consideration given up by Jumbo company B) The fair value of the shares obtained from the owners of Mini company C) The book value of the assets and liabilities of Mini company D) The fair value of the consideration given up by Jumbo company plus any direct consolidation costs incurred by Jumbo company

Explanation / Answer

Question 1

Current Asset of Large 600000

Current Asset of Tiny 400000

Less: Receivable shown in Large b/s from Tiny 10000

Consolidated Current Asset in b/s 900000

Note : Intra group balance to be eliminated, Large shown 100000 from Tiny and Tiny shown 100000 payable to Large. Journal entry would be in consolidated B/S

Payable dr 100000

to receivable 100000

Note: 40 % value of Tiny asset would be shown as non-controlling interest

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