Assume that on the balance sheet date shown below TME
Corporation acquires 70% of Abcor, Inc. common stock for $25,000 in
cash.

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Question: Assume that on the balance sheet date shown below TME Corporation acquires 70% of Abcor, Inc. com…
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Pre-acquisition Balance
Sheets
December 31, 2001
TME Corp. Abcor, Inc.
Current assets $80,000 $38,000
Other assets 28,000 15,000
Total assets $108,000 $53,000
Current liabilities $60,000 $32,000
Common stock 15,000 14,000
Retained earnings 33,000     7,000
Total liabilities and equity $108,000 $53,000

Using the acquisition method to account for the acquisition, which
of the following is closest to the post-acquisition amount that
will be recorded as the minority interest under US GAAP (using full
goodwill method)?

a.

$6,300.

b.

$21,000.

c.

$10,714.

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