Question

The following financial statements were prepared on December 31, Year 6.
Additional Information
Pearl purchased 75% of the outstanding voting shares of Silver for $2,400,000 on July 1, Year 2, at which time Silver's retained earnings were $400,000, and accumulated depreciation was $60,000. The acquisition differential on this date was allocated as follows:
• 30% to undervalued inventory
• 40% to equipment-remaining useful life 8 years
• Balance to goodwill
During Year 3, a goodwill impairment loss of $70,000 was recognized, and an impairment test conducted as at December 31, Year 6, indicated that a further loss of $20,000 had occurred. Amortization expense is grouped with cost of goods sold and impairment losses are grouped with administrative expenses. Silver owes Pearl $75,000 on December 31, Year 6.
Required:
(a) Prepare consolidated financial statements on 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 balance sheet at December 31, Year 6, under parent company extension theory.


$1.99
Sales0
Views29
Comments0
  • CreatedJune 08, 2015
  • Files Included
Post your question
5000