9. Peak Inc. purchased 80% of the outstanding voting shares of Summit Inc. for $700,000 on July 1, 2019. On that date, Summit Inc. had Common Stock and Retained Earnings worth $210,000 and $70,000. respectively. The Equipment had a remaining useful life of 10 years from the date of acquisition. Summit's Bonds Payable mature on July 1, 2039. The inventory was sold in the year following the acquisition. Both companies use straight line amortization, and no salvage value is assumed for assets. Peak Inc. and Summit Inc. declared and paid $10,000 and $5,000 in dividends, respectively during the year. (9 marks) The Balance Sheets of both companies, as well as Summit's Fair Market Values on July 1, 2019 are: Balance Sheets: Summit Inc. Fair Value Cash $230,000 $230,000 85,000 75,000 Accounts Receivable Inventory Investment in Summit Inc. Equipment (net) Land Total Assets Current Liabilities Bonds Payable Common Shares Retained Earnings Total Liabilities & Equity Peak Inc. $535,000 140,000 60,000 700,000 50,000 115,000 $1,600,000 $ 100,000 160,000 800,000 540,000 $1,600,000 85,000 45,000 80,000 200,000 $640,000 $300,000 60,000 210,000 70,000 $640,000 90,000 200,000 300,000 80,000 The following are the Income Statement and R/E Statement for both companies for the fiscal year ended June 30, 2021: Income Statements: Sales Investment Revenue Less: Expenses: Cost of Goods Sold: Amortization Interest Expense Other Expenses Net Income Retained Earnings Statements: Balance, July 1, 2019 Net Income Less: Dividends Balance, June 30, 2020 Peak Inc. $800,000 16,000 240,000 10,000 12,000 8,000 $546,000 $ 536,800 546,000 (10,000) $1,072,800 Summit Inc. $300,000 180,000 20,000 40,000 10,000 $ 50,000 $ 70,000 50,000 ($ 5,000) $115,000 9. cont'd The following is the Balance Sheet for both companies for the fiscal year ended June 30, 2021: Balance Sheets: Peak Inc. Summit Inc. Cash $ 680,000 $ 465,000 250,000 35,000 712,000 90,000 750,000 $2,482,000 $ 449,200 160,000 800,000 1,072,800 $2.482,000 Accounts Receivable Investment in Summit Inventory Equipment (net) Land Total Assets Current Liabilities Bonds Payable Common Shares Retained Earnings Total Liabilities & Equity 45,000 70,000 115,000 $730,000 $325,000 80,000 210,000 115,000 $730.000 Both companies use a FIFO system, and all of Summit's inventory on the date of acquisition was sold during the following year. The Goodwill on acquisition was impaired by $35,000 in the 2020 fiscal year. During 2019, Summit Inc borrowed $10,000 in Cash from Peak Inc. interest free to finance its operations. Peak uses the equity method to account for its Investment in Summit Inc.. Required: a) Prepare Peak's Consolidated Income Statement for the Year ended June 30, 2021. (5 marks) 9. cont'd b) Prepare Peak's Consolidated Retained Earnings Statement as at June 30, 2021. (1 mark) c) Calculate $ value for just the Non-Controlling Interest Account (on the Balance Sheet as at June 30, 2021. (4 marks)