Probiem $5-13$

L$01,2,3$

On July $1.$ Year $5.$ Bis purchased $80\%$ of the outstanding common shares of Tittle for $$122,080.$ On that date, Litlle's equipment had a fair value that sas $$21,600$ less than carrying amount. The equipment had accumulaled depreciation of $$20,000$ and an estimated remaining useful life of $8$ ycars. Also, at the date of wcquisaton, Littie had an exclusive contract with the provincial government to perform periodic environmental audits of selected mining companies for the next five years. An independent business valuator indicated that a third party might pay up to $$50,000$ to take cver this contract. All other assets and liabilities had carrying amounts equal to fair values. On June $30,$ Year $6,$ goodwill had a recoverable amount of $$20,000.$

On June $30.$ Year $6,$ the following linancial statements werc prupured. Big uses the cost method to account for its imestment.

ENCONIE SEMTENIENTS

Sales

Inestment inenme

Cost of sales

Frperises Iniso.$)$

Net insorse

Bis

S $270,000$

$\frac{10\mathrm{.}300}{250\mathrm{.}800}$

$31\mathrm{.}050$

$12\mathrm{.}150$

$5\mathrm{.}109\mathrm{.}620$

Limke

$$162\mathrm{.}000$

$\frac{162\mathrm{.}000}{94\mathrm{.}350}$

$\frac{28\mathrm{.}200}{127\mathrm{.}550}$

$539\mathrm{.}420$

RETANFD EAIVINGS STATEMLENTS

Ralanec. Jul:$-1$

This question is incomplete

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