Question: On April 1 Year 7 Princeton Corp purchased 70 of

On April 1, Year 7, Princeton Corp. purchased 70% of the ordinary shares of Simon Ltd. for $910,000. On this same date, Simon purchased 60% of the ordinary shares of Fraser Inc. for $600,000. On April 1, Year 7, the acquisition differentials from the two investments were allocated entirely to broadcast rights to be amortized over 10 years. The cost method is being used to account for both investments. During Year 7, the three companies sold merchandise to each other. On
December 31, Year 7, the inventory of Princeton contained merchandise on which Simon recorded a gross margin of $32,000. On the same date, the inventory of Fraser contained merchandise on which Princeton recorded a gross margin of $18,000. Assume a 40% tax rate.
The following information is available:
Calculate the following:
(a) Consolidated profit attributable to Princeton’s shareholders for Year 7.
(b) Non-controlling interest as at December 31, Year 7.
(c) Consolidated broadcast rights as at December 31, Year 7.
(d) Profit on Princeton’s separate-entity income statement, assuming that Princeton was a private company, uses ASPE, and uses the equity method to report its investments in subsidiaries.

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