19. Morneau Company, a 100% owned subsidiary of Robertson Corporation, sells inventory to Robertson at a 30% profit on selling price. The following data are available pertaining to inter-company purchases by Robertson: Inter-company sales: 2016: $17,600 2017: $24,300 2018: $27,000 Unsold at year end (based on selling price): 2016: $3,200 2017: $5,700 2018: $4,800 Morneau's profit numbers were $113,000, $204,000 and $225,600 for 2016, 2017, and 2018, respectively. Robertson received dividends from Morneau of S21,000 for 2016 and 2017, and $25,000 for 2018. Assume Morneau uses the cost method to account for its investment in Robertson. Compute the amount of beginning of year (ADJ) adjustment necessary for consolidation for the year ended December 31, 2017. A) S 91,040 B) $113,000 C) $112.040 D) $ 92,000 20. Feldman, Inc. paid $400,000 to acquire all of the common stock of Howell Corp. on January 1, 2017. Howell's reported earnings for 2017 totaled $89.000, and it paid $25.000 in dividends during the year. The amortization of allocations related to undervalued assets was $6,000. Feldman's net income, not including the investment, was $535.000, and it paid dividends of $90,000. What amount would appear as Equity Income on the consolidated income statement? A) $83.000 B) $89,000 C) $95.000 D) S-0- 21. When a subsidiary is acquired sometime after the first day of the fiscal year, which of the following statements is true? A) No goodwill can be recognized B) Excess cost over acquisition value is recognized at the beginning of the fiscal year. C) Income from subsidiary is not recognized until there is an entire year of consolidated operations. D) Income from subsidiary is recognized for the entire year. E) Income from subsidiary is recognized from date of acquisition to year-end. 22. What is the impact on the non-controlling interest of a subsidiary when there are downstream transfers of inventory between the parent and subsidiary companies? A) Any resulting gain or loss is reported (in total) in the current period income statement B) Any cash received is reported in Accumulated Other Comprehensive Income. C) There is no impact on the non-controlling interest of a subsidiary. D) A pro rata portion of deferred gain or loss is recognized in the income statement 23. Morneau Company, a 100% owned subsidiary of Robertson Corporation, sells inventory to Robertson at a 30% profit on selling price. The following data are available pertaining to inter-company purchases by Robertson: Inter-company sales: 2016: $17,600 2017: $24,300 2018: $27,000 Unsold at year end (based on selling price): 2016: $3,200 2017: $5,700 2018: $4,800 Morneau's profit numbers were $113,000, $204,000 and $225,600 for 2016, 2017, and 2018, respectively. Robertson received dividends from Morneau of $21,000 for 2016 and 2017, and $25,000 for 2018. Assume Morneau uses the equity method to account for its investment in Robertson. What is the balance in the pre-consolidation Income (loss) from subsidiary account for 2016? A) $112,040 B) $113,000 C) $113.960 D) $ 91,040 24. On July 1, 2016, Rogers Company paid $2,150,000 for all of the common stock of Henley, Inc. Henley's identifiable net assets had a fair value of $2,050,450 at that date. After acquisition, Henley was identified as a reporting unit and the goodwill from the acquisition was assigned to that reporting unit. a. Required: Compute the amount of goodwill, if any, from the acquisition. b. Over the remainder of the year, the new unit experienced significant operating loss suggesting the need for testing of the goodwill for impairment. The fair value of t reporting unit was estimated to be $1,085,550 at December 31. Henley's year-end balance sheet showed net assets of $1,100,000, including the goodwill. The fair vi of the identifiable net assets of Henley at year-end was $1,019,000. Prepare the required journal entry if you find that goodwill is impaired. 25. During 2016, Subsidiary sells land to Parent for $173,500. The land had a book value of $156,000. The land is then sold to a third party for $222,500 in 2020. Parent uses the equity method for the 100% investment. a. Required: Prepare the consolidation entry related to the land sale for 2016. b. Prepare the consolidation entry related to the land sale for 2017. c. Prepare the consolidation entry related to the land for 2020. d. What will be the gain on sale on the 2020 consolidated income statement