What is the value of nci at the date of acquisition

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Reference no: EM132825881

Question - Galaxy Corporation acquired 80% of the outstanding shares of united company on June 1, 2016 for P3,517,500. United Company's stockholder's equity components at the end of this year as follows: Ordinary shares, P100 par, P1,500,000, Share premium P675,000 and Retained earnings P1, 335,000. Noncontrolling interest is measured at fair value and the fair value is P705,000. The Assets of United were fairly valued, except for inventories, which are overstated by P66,000, and equipment, which was understated by P90,000. Remaining useful life of equipment is 4 year. Stockholder's equity of Galaxy on January 1, 2016 is composed of Ordinary shares P4,500,000, Share premium P1,050,000, Retained earnings P3,150,000. Goodwill, if any, should be written down by P85,350 at year-end. Net income for the first year of parent is P450,000 and the net income of subsidiary from the date of acquisition is P255,000.

Dividends declared at the end of the year amounted to P120,000 and P90,000. During the year, there was no issuance of new ordinary shares. What is the value of NCI at the date of acquisition?

Reference no: EM132825881

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