Question: Peach Ltd acquired 70 of the common shares of Cherry

Peach Ltd. acquired 70% of the common shares of Cherry Company on January 1, Year 4. On that date, Cherry had common shares of $600,000 and retained earnings of $300,000. The following is a summary of the changes in Peach's investment account from January 1, Year 4, to December 31, Year 6:
Additional Information
• Dividends declared by Cherry each year were equal to 50% of Cherry's reported profit each year.
• On January 1, Year 4, the carrying amounts of the identifiable net assets of Cherry were equal to fair values.
Calculate the following:
(a) The amount of dividends declared by Cherry in Year 4
(b) The reported profit of Cherry for Year 5
(c) The amount for non-controlling interest that would appear in the Year 6 consolidated income statement and statement of financial position
(d) The amount of goodwill that would appear on the December 31, Year 6, consolidated statement of financial position

Sale on SolutionInn
  • CreatedJune 08, 2015
  • Files Included
Post your question