Alonzo Co. acquired 60% of Beazley Corp. by paying $240,000 cash. There is no active trading market for Beazley Corp. At the time of the acquisition, the book value of Beazley's net assets was $300,000.Required:What amount should have been assigned to the noncontrolling interest immediately after the combination?
What will be an ideal response?
| Implied value of Beazley Corp. ($240,000 ÷ 60%) | $ | 400,000 | |
| Noncontrolling percentage | × | 40 | % |
| Noncontrolling interest in Beazley Corp. | $ | 160,000 | |
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What will be an ideal response?
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