Calculate goodwill and non-controlling interest

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Reference no: EM133372214

Question: Keen Inc (Keen) and Lax Inc (Lax) had the following balance sheets on October 31, 2019: Keen Inc Lax Inc Lax Inc (carrying value) (carrying value) (fair value) Cash $300,000 $80,000 $80,000 Accounts receivable 60,000 24,000 24,000 Inventory 30,000 54,000 56,000 Plant and equipment (net) 310,000 280,000 300,000 Trademark 12,000 8,000 Total assets $700,000 $450,000 Accounts payable 150,000 $200,000 200,000 Bonds payable 400,000 120,000 100,000 Common shares 100,000 60,000 Retained earnings 50,000 70,000 Total liabilities and equity $700,000 $450,000 Keen Inc. purchases 80% of Lax Inc. for cash of $160,000 on November 1, 2019, using the fair value enterprise (FVE) method:

Required:

a) Calculate goodwill and non-controlling interest on the consolidated balance sheet.

b) Prepare the consolidated balance sheet on the date of acquisition.

Reference no: EM133372214

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