On January 1, Year 5, Pic Company acquired 7.500 ordinary shares of Sic Company for $717,000. On January 1, Year 6. Pic Company acquired an additional 2,000 ordinary shares of Sic Company for $210,000. On January 1, Year 5, the shareholders' equity of Sic was as follows: Ordinary shares (10,000 no par value shares issued) Retained earnings sic The following are the statements of retained earnings for the two companies for Years 5 and 6: Retained earnings, beginning of year Profit Dividends Retained earnings, end of year $200,000 330,000 $530,000 Pic (1) Customer contracts (ii) Non-controlling interest (iii) Retained earnings Year 5 Year 6 $ 542,000 $ 593,000 151,000 162,000 (100,000) (120,000) $ 593,000 Year 5 Year 6 $ 330,000 $ 353,000 113,000 148,000 (90,000) (90,000) $635,000 $ 353,000 $ 411,000 Additional Information . Pic uses the cost method to account for its investment in Sic. . Any acquisition differential is allocated to customer contracts, which are expected to provide future benefits until December 31, Year 7. Neither company has any customer contracts recorded on their separate-entity records. . There were no unrealized profits from intercompany transactions since the date of acquisition. $ Required: (a) Calculate consolidated profit attributable to Pic's shareholders for Year 6. (Omit $ sign in your response.) Consolidated profit attributable to Pic's shareholders $ (b) Calculate the following account balances for the consolidated statement of financial position at December 31, Year 6: (Omit $ sign In your response.)
On January 1, Year 5, Pic Company acquired 7.500 ordinary shares of Sic Company for $717,000. On January 1, Year 6. Pic Company acquired an additional 2,000 ordinary shares of Sic Company for $210,000. On January 1, Year 5, the shareholders' equity of Sic was as follows: Ordinary shares (10,000 no par value shares issued) Retained earnings sic The following are the statements of retained earnings for the two companies for Years 5 and 6: Retained earnings, beginning of year Profit Dividends Retained earnings, end of year $200,000 330,000 $530,000 Pic (1) Customer contracts (ii) Non-controlling interest (iii) Retained earnings Year 5 Year 6 $ 542,000 $ 593,000 151,000 162,000 (100,000) (120,000) $ 593,000 Year 5 Year 6 $ 330,000 $ 353,000 113,000 148,000 (90,000) (90,000) $635,000 $ 353,000 $ 411,000 Additional Information . Pic uses the cost method to account for its investment in Sic. . Any acquisition differential is allocated to customer contracts, which are expected to provide future benefits until December 31, Year 7. Neither company has any customer contracts recorded on their separate-entity records. . There were no unrealized profits from intercompany transactions since the date of acquisition. $ Required: (a) Calculate consolidated profit attributable to Pic's shareholders for Year 6. (Omit $ sign in your response.) Consolidated profit attributable to Pic's shareholders $ (b) Calculate the following account balances for the consolidated statement of financial position at December 31, Year 6: (Omit $ sign In your response.)
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings
Section: Chapter Questions
Problem 11SPB
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