Additional Information - Kent acquired its 40% interest in the common shares of Laurier in Year 3 at a cost of $843,000 and uses the cost method to account for its investment for internal record keeping. - The changes to acquisition differential schedule pertaining to Kent's 40% interest showed the following write-off for Year 9 : - Depreciation expense and goodwill impairment loss are included with selling and administrative expenses. - In Year 9, rent amounting to $30,000 was paid by Laurier to Kent. Kent has recorded this as other income. - In Year 6, Kent sold land to Laurier and recorded a profit of $93,000 on the transaction. During Year 9 , Laurier sold 30% of the land to an unrelated land development company. - During Year 9, Laurier paid dividends totalling $107,000. - It has been established that Kent's 40% interest would not be considered control in accordance with IFRS. - Assume a 40% tax rate. Required: (a) Assume that Laurier is a joint venture that is owned by Kent and two other unrelated venturers. Also assume that Kent acquired its interest after Laurier's initial formation, and that the acquisition differentials are therefore valid. Prepare the income statement of Kent for Year 9 using the equity method. (Input all amounts as positive values. Omit \$ sign in your response.) Note 1: (b) Assume that Laurier is a joint operation. Prepare Kent's income statement for Year 9 using proportionately adjusted financial statements. (Input all amounts as positive values. Omit \$ sign in your response.) Calculation of consolidated net income Year 9 Additional Information - Kent acquired its 40% interest in the common shares of Laurier in Year 3 at a cost of $843,000 and uses the cost method to account for its investment for internal record keeping. - The changes to acquisition differential schedule pertaining to Kent's 40% interest showed the following write-off for Year 9 : - Depreciation expense and goodwill impairment loss are included with selling and administrative expenses. - In Year 9, rent amounting to $30,000 was paid by Laurier to Kent. Kent has recorded this as other income. - In Year 6, Kent sold land to Laurier and recorded a profit of $93,000 on the transaction. During Year 9 , Laurier sold 30% of the land to an unrelated land development company. - During Year 9, Laurier paid dividends totalling $107,000. - It has been established that Kent's 40% interest would not be considered control in accordance with IFRS. - Assume a 40% tax rate. Required: (a) Assume that Laurier is a joint venture that is owned by Kent and two other unrelated venturers. Also assume that Kent acquired its interest after Laurier's initial formation, and that the acquisition differentials are therefore valid. Prepare the income statement of Kent for Year 9 using the equity method. (Input all amounts as positive values. Omit \$ sign in your response.) Note 1: (b) Assume that Laurier is a joint operation. Prepare Kent's income statement for Year 9 using proportionately adjusted financial statements. (Input all amounts as positive values. Omit \$ sign in your response.) Calculation of consolidated net income Year 9