Assignment Problems For Chapter 5
(The solutions for these problems are only available in
the solutions manual that has been provided to your instructor.)
Assignment Problem Five - 1
(Open Trial Balance - No Profits - NCI On Assets - Equity Method Calculations)
On January 1, 2009, the Perry Company purchased 72 percent of the outstanding voting
shares of the Styan Company for $3,975,000 in cash. On that date, the Styan Company had
No Par Common Stock of $1,680,000 and Retained Earnings of $3,570,000. All of the Styan
Company’s identifiable assets and liabilities had carrying values that were equal to their fair
values except for:
1. Inventories which had fair values of $1,806,000 and carrying values of
2. Buildings which had fair values that were $175,000 more than their carrying
values and a remaining useful life of 20 years.
3. Land which had a fair value of $1,596,000 and a carrying value of $1,400,000.
4. A Patent with a nil carrying value and a fair value of $154,000. The patent has a
remaining life of two years.
5. Long-Term Liabilities which had fair values that were $210,000 more than their
carrying values and mature on December 31, 2018.
Perry records the at acquisition non-controlling interest in Styan based on this interest’s share
of the fair value of the identifiable net assets of Styan.
The Balance Sheets of the Perry Company and the Styan Company as at December 31, 2011
were as follows:
Perry and Styan Companies
As At December 31, 2011
Investment in Styan (Cost)
No Par Common Stock
Canadian Advanced Accounting (2nd IC Edition) - Assignment Problems