On January 1, year 1, Ritt Corp. purchased 80% of Shaw
Corp.’s $10 par common stock for $975,000. On this date, the
carrying amount of Shaw’s net assets was $1,000,000. The fair
values of Shaw’s identifiable assets and liabilities were the same as
their carrying amounts except for plant assets (net) with fair values
of $100,000 in excess of their carrying amount. The fair value
of the noncontrolling interest in Shaw on January 1, year 1, was
$250,000. For the year ended December 31, year 1, Shaw had
net income of $190,000 and paid cash dividends totaling
$125,000.
In the January 1, year 1 consolidated balance sheet, goodwill
should be reported at