In January 20X3 Paris Ink Company Paris purchased 80 of
In January 20X3, Paris Ink Company (Paris) purchased 80% of the common shares of Slade Paper Ltd. (Slade) by issuing common shares worth $ 800,000. At that date, Slade’s common shares and retained earnings totaled $ 250,000 and $ 340,000 respectively. The net carrying values and fair values of the net identifiable assets of Slade were the same except for the following:
1. The fair market value (FMV) of inventory was greater than carrying value by $ 50,000.
2. The FMV of capital assets had replacement cost that exceeded net carrying value (NCV) by $ 120,000, although net realizable value exceeded NCV by only $ 60,000 (management planned to retain the capital assets throughout their remaining useful life of 12 years).
3. Although the NCV of Slade’s bonds payable was $ 400,000, the FMV was $ 460,000, due to a decline in the interest rates since the bonds were originally issued. The bonds payable mature on December 31, 20X8, and have a nominal rate of interest of 12%. The companies use straight-line amortization for bond premiums and discounts.
The financial statements for Paris and Slade for the year ended December 31, 20X5, are presented in Exhibit B. Additional information on transactions between Paris and Slade is presented in Exhibit C. Exhibit B Financial Statements
Statements of Comprehensive Income
For the Year Ended December 31, 20X5

Statements of Financial Position
As at December 31, 20X5

Exhibit C
Additional Information
1. On July 1, 20X5, Paris advanced Slade $ 200,000, due on July 1, 20X6. Interest of 8% is due at maturity.
2. Intercompany sales from Slade to Paris were as follows for 20X3– 20X5:

All amounts in closing inventory at the end of each year were sold during the first four months of the following year.
3. On March 1, 20X5, Slade sold land to Paris for $ 300,000. The original cost of the land was $ 200,000. Assume this transaction was taxed at the company’s normal tax rate.
4. During 20X5, Paris sold inventory to Slade for $ 108,000, which represented a markup of 35% above cost. At December 31, 20X5, 20% of these goods remained in inventory.
5. During 20X5, Paris paid dividends of $ 250,000 and Slade paid dividends of $ 50,000.
6. Paris and Slade pay taxes at 40% and 25% rates, respectively.

1. Calculate the carrying value of the goodwill on the consolidated financial statements of Paris Ink Company at December 31, 20X5. Paris tests goodwill for impairment on an annual basis.
2. Prepare a consolidated SCI for Paris Ink Company for the year ended December 31, 20X5.
3. Calculate the following balances for Paris Ink Company’s consolidated statement of financial position as at December 31, 20X5:
a) Inventory
b) Non-controllinginterest
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