Big Justine Corporation owns 80% of the stock of Little Bill, Inc. At December 31, 2012, Little Bill had the following summarized balance sheet: You must show your work.
|LITTLE BILL, INC. Balance Sheet December 31, 2012|
|Current assets||$90,000||Current liabilities||$50,000|
|Property, plant, and equipment (net)||400,000||Capital stock||40,000|
What would Big Justine report as the amount of noncontrolling interest on their balance sheet?
In what section of the balance sheet (Assets, Liabilities or Equity) does GAAP require Big Justine's noncontrolling interest in Little Bill be reported?
Investment in Subsidiary
Investment in a subsidiary arises when a company acquires another company with an ownership interest of 51% or more. There must be control. This is accounted for by using the acquisition method.
Answer and Explanation:
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from Corporate Finance: Help & ReviewChapter 2 / Lesson 6