The Following Balances Were Taken from the Records of S

Essay

The following balances were taken from the records of S Company: P Company purchased 75% of S Company's common stock on January 1, 2014 for $900,000. The difference between implied value and book value is attributable to assets with a remaining useful life on January 1, 2016 of ten years.
Required:
A. Compute the difference between cost/(implied) and book value applying:
1. Parent company theory.
2. Economic unit theory.
B. Assuming the economic unit theory:
1. Compute noncontrolling interest in consolidated income for 2016.
2. Compute noncontrolling interest in net assets on December 31, 2016.