Show the calculations and journal entries to record company

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Company A subsequently sells 60% of the voting interest in Company S for $900,000. The fair value of Company A's retained interest of 10% in the voting stock in Company S is $120,000. The carrying amount of the identifiable net assets of Company S, exclusive of goodwill, is $770,000 (assume the increase in value was already recorded by Company A by recording a debit to investment and a credit to income, both for $70,000). Assume for purposes of this example that the carrying amount of the NCI under the proportionate method and the fair value method are unchanged from the value at the date of the additional 10% interest purchased by Company A.

Required:

1. Show the calculations and journal entries to record Company A's initial investment in Company S under the fair-value method of accounting for NCI.

2. Show the calculations and journal entries to record Company A's additional investment in Company S under the fair-value method of accounting for NCI.

3. Show the calculations and journal entries to record Company A's sale of its 60% investment in Company S under the fair-value method of accounting for NCI.

Reference no: EM13591301

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