Please help with the answers Thank you Big Company acquires 90 percent of Little
ID: 2511634 • Letter: P
Question
Please help with the answers Thank you
Big Company acquires 90 percent of Little Comp date, Little has unpatented technology that has not previously been recorded but is worth $100,000. It should have a life of five years. In addition, goodwill of $40,000 is recognized. By the end of Year One, Little reports net income for the period of S300,000. What amount should be recognized on the Year One financial statements as the noncontrolling interest in the net income of Little? y on January 1, Year One. On that an Question 7 options A) Zero B) $27,900 C) $28,000 D) $30,000 Question 8 (7 points) The Great Corporation bought several other companies a few years ago and recognized a large amount of goodwill. In preparing financial statements for the current year, one of the reporting units in this business combination has a significant portion of that goodwill. At the end of the current year, officials have looked at a variety of qualitative factors and believe that there is a 59 percent chance that this particular reporting unit has a fair value that is larger than its current carrying value. What is the impact of this determination'? Question 8 options A) There is no impact based on this determination. B) The reporting unit must now perform tests to determine if the goodwill balance has been impaired. C) No further testing is needed this year for this reporting unit as far as goodwill impairment is concerned. D) Goodwill is impaired according to this information and must be written down and a n loss recognizedExplanation / Answer
7. Non-controlling asest should not be recognised in the financial statement of Little.
Financial statement should be consolidated with Big and non controlling interest if any would be recognised by Big not Little.
Non-controlling interest always recognised by Holding company not subsidiary
answer (a) Zero