2. Yost Company purchased 75% of Sinker Company\'s common stock on January 1, 20

Question

2. Yost Company purchased 75% of Sinker Company's common stock on January 1, 20x6 for $360,000. On that date, Sinker reported common stock of $240,000 and retained earnings of $120,000. Based on these facts, we can conclude that A) the fair value of Sinker's net assets were equal to the book value on the date of B) the amount reported in Yost's investment in Sinker Company account on January acquisition 1, 20X6 was $480,000 the fair value of the NCI in the Net Assets of Sinker Company on January 1,20x6 C) was $120,000 D) Yost Company reported a gain on a bargain purchase as a result of the acquisition of Sinker

Explanation / Answer

As per business combination whenever company obtain mote than 50 percent in common stock of any company it means it acquire control in the acquiree company.

As per the given information yost company acquired 75 % for 3,60,000 means value for NCI = 3,60,000/75 * 25 = 1,20,000

Hence from the above conclusions option C is correct

Please please upvote it at the end thank you so much

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