Calculate the following:

(a) The amount of dividends declared by Cherry in Year 4

(b) The reported profit of Cherry for Year 5

(c) The amount for non-controlling interest that would appear in the Year 6 consolidated income statement and statement of financial position

(d) The amount of goodwill that would appear on the December 31, Year 6, consolidated statement of financial position.

Peach Ltd. acquired 80% of the common shares of Cherry Company on January 1, Year 4. On that date, Cherry had common shares of $710,000 and retained earnings of $410,000.
The following is a summary of the changes in Peach's investment account from January 1, Year 4, to December 31, Year 6:

Additional Information:

• Dividends declared by Cherry each year were eq,ual to 50% of Cherry's reported profit each year.

• On January 1, Year 4, the carrying amounts of the identifiable net assets of Cherry were equal to fair values.
• There was a goodwill impairment loss each year since the date of acquisition.

Transcribed Image Text:

INVESTMENT IN CHERRY January 1, Year 4 December 31, Year 4 Cost $ 935,000 Equity method income Dividends 68,300 (39,000) December 31, Year 5 Equity method income 80,200 (46,000) Dividends Equity method income Dividends Balance December 31, Year 6 94,900 (53,000) $1,040,400