Polaris Incorporated Purchased 80% of the Solar Company on January

Essay

Polaris Incorporated purchased 80% of The Solar Company on January 2,2011,when Solar's book value was $800,000.Polaris paid $700,000 for their acquisition,and the fair value of noncontrolling interest was $175,000.At the date of acquisition,the fair value and book value of Solar's identifiable assets and liabilities were equal.At the end of the year,the separate companies reported the following balances:
Requirement 1: Calculate consolidated balances for each of the accounts as of December 31,2011.
Requirement 2: Assuming that Solar has paid no dividends during the year,what is the ending balance of the noncontrolling interest in the subsidiary?