During 20X5, the following transactions occurred between Regina Ltd. and Dakota Ltd. (see SSP2): a. Regina...

    

Transcribed Image Text:

During 20X5, the following transactions occurred between Regina Ltd. and Dakota Ltd. (see SSP2): a. Regina lent $50,000 at 10% interest to Dakota Ltd. on July 1, 20X5, for one year. The interest was unpaid at December 31, 20X5. b. During 20X5, Regina purchased inventory from Dakota at a cost of $400,000; $100,000 of that amount was still in Regina's inventory at the end of 20X5. (Hint: look at Dakota's SCI to compute Dakota's gross profit percentage.) c. During 20X5, Dakota purchased inventory of $200,000 from Regina; $40,000 of that amount was still in Dakota's inventory at the end of 20X5. Exhibit 5.14 Regina Ltd. and Dakota Ltd., SFP, SCI, and SCE/RE Statements of Financial Position December 31, 20X5 Current assets: Cash Accounts and other receivables Inventories Capital assets: Land Buildings Accumulated depreciation Equipment Accumulated depreciation Other assets: Investment in Dakota Ltd. (at cost) TOTAL ASSETS Liabilities: Current accounts payable and accrued liabilities Long-term liabilities Shareholders' equity Common shares Retained earnings TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY Regina Ltd. Dakota Ltd. $ 28,000 110,000 160,000 298,000 300,000 (45,000) 200,000 (80,000) 375,000 150,000 $823,000 $ 40,000 65,000 105,000 370,000 348,000 718,000 $823,000 $ 10,000 30,000 60,000 100,000 135,000 150,000 (60,000) 130,000 (90,000) 265,000 $365,000 $ 80,000 50,000 130,000 100,000 135,000 235,000 $365,000 Sales Dividend income Other income Statements of Comprehensive Income Year Ended December 31, 20X5 Cost of sales Other operating expenses Interest expense NET INCOME AND COMPREHENSIVE INCOME Retained earnings, December 31, 20X4 Net income Regina Ltd. $2,000,000 24,000 7,000 Dividends declared Retained earnings, December 31, 20X5 2,031,000 1,000,000 886,000 2,000 1,888,000 $ 143,000 Statements of Changes in Equity-Retained Earnings Section Year Ended December 31, 20X5 Dakota Ltd. $1,000,000 1,000,000 600,000 280,000 10,000 890,000 $ 110,000 $ 225,000 143,000 (20,000) $348,000 Regina Ltd. Dakota Ltd. $ 65,000 110,000 (40,000) $ 135,000 d. Dakota's building and equipment were estimated to have remaining useful lives from January 10, 20X5, of 10 and 5 years, respectively. Straight-line depreciation is being used. e. There has been no impairment of goodwill. f. No fixed assets were sold or written off during 20X5. The December 31, 20X5, separate-entity financial statements for both companies are shown in Exhibit 5.14. Required Prepare the consolidated statement of income and retained earnings and the consolidated SFP for Regina Ltd. for the year ended December 31, 20X5. During 20X5, the following transactions occurred between Regina Ltd. and Dakota Ltd. (see SSP2): a. Regina lent $50,000 at 10% interest to Dakota Ltd. on July 1, 20X5, for one year. The interest was unpaid at December 31, 20X5. b. During 20X5, Regina purchased inventory from Dakota at a cost of $400,000; $100,000 of that amount was still in Regina's inventory at the end of 20X5. (Hint: look at Dakota's SCI to compute Dakota's gross profit percentage.) c. During 20X5, Dakota purchased inventory of $200,000 from Regina; $40,000 of that amount was still in Dakota's inventory at the end of 20X5. Exhibit 5.14 Regina Ltd. and Dakota Ltd., SFP, SCI, and SCE/RE Statements of Financial Position December 31, 20X5 Current assets: Cash Accounts and other receivables Inventories Capital assets: Land Buildings Accumulated depreciation Equipment Accumulated depreciation Other assets: Investment in Dakota Ltd. (at cost) TOTAL ASSETS Liabilities: Current accounts payable and accrued liabilities Long-term liabilities Shareholders' equity Common shares Retained earnings TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY Regina Ltd. Dakota Ltd. $ 28,000 110,000 160,000 298,000 300,000 (45,000) 200,000 (80,000) 375,000 150,000 $823,000 $ 40,000 65,000 105,000 370,000 348,000 718,000 $823,000 $ 10,000 30,000 60,000 100,000 135,000 150,000 (60,000) 130,000 (90,000) 265,000 $365,000 $ 80,000 50,000 130,000 100,000 135,000 235,000 $365,000 Sales Dividend income Other income Statements of Comprehensive Income Year Ended December 31, 20X5 Cost of sales Other operating expenses Interest expense NET INCOME AND COMPREHENSIVE INCOME Retained earnings, December 31, 20X4 Net income Regina Ltd. $2,000,000 24,000 7,000 Dividends declared Retained earnings, December 31, 20X5 2,031,000 1,000,000 886,000 2,000 1,888,000 $ 143,000 Statements of Changes in Equity-Retained Earnings Section Year Ended December 31, 20X5 Dakota Ltd. $1,000,000 1,000,000 600,000 280,000 10,000 890,000 $ 110,000 $ 225,000 143,000 (20,000) $348,000 Regina Ltd. Dakota Ltd. $ 65,000 110,000 (40,000) $ 135,000 d. Dakota's building and equipment were estimated to have remaining useful lives from January 10, 20X5, of 10 and 5 years, respectively. Straight-line depreciation is being used. e. There has been no impairment of goodwill. f. No fixed assets were sold or written off during 20X5. The December 31, 20X5, separate-entity financial statements for both companies are shown in Exhibit 5.14. Required Prepare the consolidated statement of income and retained earnings and the consolidated SFP for Regina Ltd. for the year ended December 31, 20X5.

Answer rating: 100% (QA)

mouths Prepare Consolidated statement of Income and retained earnings and SFP fu Dec 31 20xs ... View the full answer