Additional Information

At the acquisition date, the equipment had an expected remaining useful

life of ten years. Both companies use the straight$-$line method for all

depreciation and amortization calculations and the FIFO inventory cost

flow assumption. Assumea $40\%$ income tax rate on all applicable items

and that there were no impairment losses for goodwill.

On September $1,$ Year $11,$ Devine sold a parcel of land to Vine and

recorded a total non$-$operating gain of $$470,000.$

Sales of finished goods from Vine to Devine totalled $$1,070,000$ in Year

$10$ and $$2,070,000$ in Year $11.$ These sales were priced to provide a gross profit margin on selling price of $\frac{331}{3}\%$ to the Vine Company. Devine's

December $31,$ Year $10,$ inventory contained $$321,000$ of these sales;

December $31,$ Year $11,$ inventory contained $$621,000$ of these sales.

Sales of finished goods from Devine to Vine were $$870,000$ in Year $10$

and $$1,270,000$ in Year $11.$ These sales were priced to provide gross

profit margin on selling price of $40\%$ to the Devine Company. Vine's

December $31,$ Year $10,$ inventory contained $$170,000$ of these sales; the

December $31,$ Year $11,$ inventory contained $$570,000$ of these sales.

Vine's investment in Devine's account is carried in accordance with the cost

method and includes:

Acquisition cost of $60,000$ of the $80,000$ ordinary shares of the

Devine Company for $$80$ per share for a total of $$4,800,000$ and

Advances to Devine of $$270,000,$ which are ako included in the

current liabilities of Devine.

There are no intercompany amounts other than those noted, except for the

dividends of $$500,000($ootal amount$)$ declared and paid by Devine.

Required: Prepare in good form the following:

A statement for the cakculation and Allocation of the Acquisition

Differential on the date of Vine's investment in Devine Jan $1,$ Year $7$

What is the value of the NCI on Jan $1,$ Year $7$ the date of the acquisition?

Acquisition Differential Amortization$/$ Impairment Schedule for the period

ended December $31,$ Year $11$

Schedule of Realized $/$ Unrealized Profit on Inter company Sales of

Inventory for the Year ended December $31,$ Year $11$

Schedule of Realized $/$ Unrealized Gain on Sale of Land for the period Dec

$31,$ Year $11$

Compute the Consolidated Net Income for the Year Ended December $31,$

Year $11$

What is the Non$-$Controlling Interests $($NCI$)$ share of Net Income for the

year ended December $31,$ Year $11$ Prepare a Statement of Consolidated Retained Earnings as at December $31,$

Year $11$

Prepare a Statement of NCI Balance Sheet as at December $31,$ Year $11$

$10.$Prepare the Consolidated Income Statement for the period ended December

$31,$ Year $11$

$11.$Prepare the Consolidated Balance Sheet as at December $31,$ Year $11$ASSIGNMENT:

On January $1,$ Year $7,$ the Vine Company purchased $60,000$ of the $80,000$

ordinary shares of the Devine Company for $$80$ per share. On that date, Devine

had ordinary shares of $$3,440,000,$ and retained earnings of $$2,170,000.$

When acquired, Devine had inventories with fair values $$30,000$ less than

carrying amount, a parcel of land with a fair value $$270,000$ greater than the

carrying amount, and equipment with a fair value $$270,000$ less than carrying

amount. There were also internally generated patents with an estimated market

value of $$470,000$ and a five$-$year remaining life. A long$-$term liability had a

market value $$170,000$ greater than carrying amount; this liability was paid off

December $31,$ Year $10.$ All other identifiable assets and liabilities of Devine had

fair values equal to their carrying amounts. Devine's accumulated depreciation on

the plant and equipment was $$570,000$ at the date of acquisition.

The year $11$ financial statements for Vine and Devine were as follows: