Q36 mock 2010 AM 2010, account, already, company

Flok

The company doesn’t have control under US gaap, so even it has 50% equity we cannot use consolidasition method but have to use Equity method, right? Why the answer is1800? They already account for 50% of total equity of target firm.
Anybody did this pls help explain . Thanks

dandman

The question states if Merick prepared a consolidated balance sheet - meaning report it under acquisition method. This will mean to include all asset and liability into balance sheet and also account for the 50% minority interest of 0.5 * 1000 = $500.
So you will end up with 1300 + 500 = $1800