For 20X8, Insure amortized its acquisition differential as follows:

Buildings $ 11,700

Long-term liabilities (16,250)

Goodwill impairment loss 16,900 $ 12,350

During 20X8, Go-med paid royalties of $162,500 to Insure, which Insure included in its other income.

During 20X8, Go-med sold land to a third party. It had acquired the land 3 years ago from Insure. At that time, Insure had recorded a profit on the sale of $29,250.

During 20X8, Go-med declared and paid dividends of $104,000.

Both Insure and Go-med pay taxes at an average rate of 40%.

Insure acquired 40% of the common shares of Go-med in 20X2 for $1,072,500.

Required:

Assume that Go-med is a joint venture owned by Insure and four other ventures, that the acquisition differentials are valid, and that it has not yet adopted IFRS 11: Joint Arrangements. Prepare a 20X8 consolidated income statement for Insure using proportionate consolidation

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Income Statements Year Ended December 31, 20X8 Sales Other income Gain on sale of land Cost of sales Operating expenses Income tax Net income Insure Co. $3,900,000 260,000 4,160,000 1,820,000 780,000 520,000 3,120,000 $1.040,000 Go-med Co. $1,560,000 91,000 130,000 1,781,000 728,000 559,000 195,000 1,482,000 $ 299,000 Income Statements Year Ended December 31, 20X8 Sales Other income Gain on sale of land Cost of sales Operating expenses Income tax Net income Insure Co. $3,900,000 260,000 4,160,000 1,820,000 780,000 520,000 3,120,000 $1.040,000 Go-med Co. $1,560,000 91,000 130,000 1,781,000 728,000 559,000 195,000 1,482,000 $ 299,000

Answer rating: 100% (QA)

Consolidated income statement for 20x8 Net income ... View the full answer