Attributable to: Palm's shareholders Non-controlling interest x Answer is not complete. Palm Inc. Consolidated Statement of Financial Position As at December 31, Year 6 Assets Plant assets 599,000 X Goodwill Investments 122,000 Notes receivable 19,000 Inventory 460,000 Accounts receivable 302,000 Cash 68,000 Trademarks 15, 100 $ 1,585, 100 Liabilities and Equity Ordinary shares 590,000 Retained earnings Non-controlling interest Notes payable 320,000 Other current liabilities 78,000 Accounts payable 223,000 $ 1,211,000On December 31, Year 2, Palm Inc. purchased 80% of the outstanding ordinary shares of Storm Company for $400,000. At that date, Storm had ordinary shares of $290,000 and retained earnings of $69,000. In negotiating the purchase price, it was agreed that the assets on Storm's statement of financial position were fairly valued except for plant assets, which had a $40,000 excess of fair value over carrying amount. It was also agreed that Storm had unrecognized intangible assets consisting of trademarks that had an estimated value of $27,000. The plant assets had a remaining useful life of eight years at the acquisition date and the trademarks would be amortized over a 12-year period. Any goodwill arising from this business combination would be tested periodically for impairment. Palm accounts for its investment using the cost method. Financial statements for Palm and Storm for the year ended December 31, Year 6, were as follows: STATEMENTS OF FINANCIAL POSITION December 31, Year 6 Palm Storm Assets Plant assets (net) S 320, 000 $ 250, 000 Investment in Storm 400, 000 Other investments 91, 000 31, 000 Notes receivable 19, 000 Inventory 190, 000 270, 000 Accounts receivable 97, 000 205, 000 Cash 29, 000 39, 000 $1, 127, 000 $ 814, 000 Shareholders' Equity and Liabilities Ordinary shares $ 590, 000 $ 290, 000 Retained earnings 200, 000 240, 000 Notes payable 175, 000 145, 000 Other current liabilities 19, 000 59, 000 Accounts payable 143, 000 80, 000 $1, 127, 000 $ 814, 000 INCOME STATEMENTS For the year ended December 31, Year 6 Palm Storm Sales $ 960, 000 $ 605, 000 Cost of goods sold (683, 000) (405, 000) Gross profit 277, 000 S 200, 000 Selling expenses (31, 000) (44, 000) Other expenses (166, 000) 90, 000) Interest and dividend income 43, 000 11, 000 Profit $ 123, 000 77, 000(b) Assuming that none of the acquisition differential had been allocated to trademarks at the date of acquisition complete the table given below. (Leave no cells blank - be certain to enter "0" wherever required. Negative amount should be indicated by a minus sign. Omit $ sign in your response.) Bal Changes Bal Dec. 31/Yr2 to Dec. 31/Yr2 Dec. 31/Yr5 Yr6 Dec. 31/Yr6 Plant assets S S $ Goodwill S S $ $Additional Informs don At December 31, Year 6, an impairment test of Storm's goodwill revealed the following: Fair value less disposal costs based on recent offer :"rocn prospective purchaser $ 55, ODD 1.'elue in use based on LutdisooLu'lted future net cash flows 7-1, ODD Value in use based on discounted :"utuIe net cash floss using s discount rate of: 5'53; which is Storm: 5 increments] horror-King rate 455, ODD 4%; which is the riskfree rate on government bonds all. 000 - An impairment test indicated that the trademarks had a recoverable amount of $15,100. The impairment loss on these assets occurred entirely.r in Year 5. - On December 26, Year 6, Palm declared dividends of $45,000, while Storm declared dividends of $293000. - Amortization expense is reported in selling expenses, while impairment losses are reported in other expenses. Required: {a} Prepare consolidated financial statements. {Input all values as positive numbers.) l 9 Answer is not complete. l a tame Interest and dividend income 9 mm] 1,500,000 (3051 of goods sold 9 1,033,0000 Selling expenses 0 85,1101] 3" Other expenses 0 _ 1.173300 Auributable to: Pal m's shareholders