In the current year, Company A is formed with $630,000 in capital from the sale of 21,000 shares of stock at $30 a share. Company A, which has no other operations, immediately acquires 60% of the voting stock of Company S for $630,000. Company S is a business whose fair value of identifiable net assets on the date of Company A's acquisition is $700,000. This amount includes a $30,000 premium that was paid to gain control of Company S. The fair value of the 40% non-controlling interest (NCI) is $400,000.

Company A subsequently sold another 3,000 shares of its stock at $50 per share. Company A used the $150,000 proceeds to acquire 10% of the outstanding voting stock of Company S held by the NCI. Assume, for purposes of this example, that the carrying amount of the NCI under the proportionate method and the fair-value method is unchanged from the value at the original investment date by Company A.

Company A subsequently sells 60% of the voting interest in Company S for $900,000. The fair value of Company A's retained interest of 10% in the voting stock in Company S is $120,000. The carrying amount of the identifiable net assets of Company S, exclusive of goodwill, is $770,000 (assume the increase in value was already recorded by Company A by recording a debit to investment and a credit to income, both for $70,000). Assume for purposes of this example that the carrying amount of the NCI under the proportionate method and the fair value method are unchanged from the value at the date of the additional 10% interest purchased by Company A.

Required

? Show the calculations and journal entries to record Company A's initial investment in Company S under the fair-value method of accounting for NCI.

? Show the calculations and journal entries to record Company A's additional investment in Company S under the fair-value method of accounting for NCI.

Show the calculations and journal entries to record Company A's sale of its 60% investment in Company S under the fair-value method of accounting for NCI.