Question

On July 1, Year 4, Aaron Co. purchased 80% of the voting shares of Bondi Ltd. For $543,840. The statement of financial position of Bondi on that date follows. The accounts receivable of Bondi were collected in October Year 4, and the inventory was completely sold by May Year 5. Bondi's fixed assets had a remaining life of 15 years on July 1, Year 4, and the bonds payable mature on June 30, Year 8. The bonds were issued on July 1, Year 1. The stated rate of interest on the bonds is 6% payable semi-annually. The market rate of interest was 8% on July 1, Year 4. Tests for impairment of goodwill indicated a loss of $8,329 in Year 5 and $5,553 in Year 6.
The financial statements for Aaron and Bondi at December 31, Year 6, are presented below. Aaron has used the equity method to account for its investment in Bondi.
Required:
(a) Prepare the consolidated financial statements for the year ended December 31, Year 6.
(b) Calculate goodwill impairment loss and non-controlling interest on the consolidated income statement for the year ended December 31, Year 6, under parent company extension theory.
(c) Calculate goodwill and non-controlling interest on the consolidated statement of financial position at December 31, Year 6, under the parent company extension theory.


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  • CreatedJune 08, 2015
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