On January 1, 2011, Dataworx acquired 60% of the shares of Glider for $111,700. At this date, the equity of

Glider consisted of:

Share capital......... $120,000

Retained earnings....... 40,000

At this date, the identifiable assets and liabilities of Glider were recorded at fair value except for the following assets:

The equipment has a further five-year life. Half the inventory on hand at the acquisition date was sold by December 31, 2011, with the remainder being sold in 2012. At December 31, 2013, the goodwill was written down by $3,000 as the result of an impairment test.
Dataworx uses the full goodwill method. The fair value of the non-controlling interest at January 1, 2011, was $74,100.
During the three years since acquisition, Glider has recorded the following annual results:
Year ended Profit
December 31, 2011....... $15,000
December 31, 2012....... 27,000
December 31, 2013....... 12,000
There has been no dividend paid or declared by Glider since the acquisition date.
The equipment owned by Glider on January 1, 2011, was sold on June 30, 2012, for $70,000. The tax rate is 30%.
Required
(a) Prepare the consolidated financial statement adjustments as at January 1, 2011.
(b) Prepare the consolidated financial statement adjustments for the year ended December 31, 2011.
(c) Prepare the consolidated financial statement adjustments for the year ended December 31, 2012.
(d) Prepare the consolidated financial statement adjustments for the year ended December 31, 2013.

Transcribed Image Text:

Equipment (cost $80,000) Land Inventory Carrying amount $65,000 80,000 45,000 Fair value $75,000 90,000 50,000