Fargo Transport purchased 80 percent of the stock of Bismarck Trucking on December 31, 2006, for
$480,000. The equity section of Bismarck's balance sheet on that date was as follows:
Identifiable net assets of Bismarck had book values equal to market values. Any purchase differential is
attributable to goodwill. In each of the years 2007 and 2008, Bismarck reported net income of $70,000 and
dividends of $20,000.
Based on the preceding information, the likely overall fair value of Bismarck Trucking as a continuing
operation on December 31, 2006, was:
Based on the preceding information, the amount of goodwill to be reported in the December 31, 2007,
balance sheet is:
A. $ 0.
B. $ 78,000.
C. $ 80,000.
Based on the preceding information, the balance of Fargo's investment in the Bismarck account on
December 31, 2008, before consolidated financial statements are prepared, should be:
Based on the preceding information, the amount that should be reported as noncontrolling interest in the
December 31, 2006, consolidated balance sheet prepared immediately following the acquisition is:
A. $ 0.
B. $ 50,000.