ario.com/secured lockdown abled: Assignment 20 Paper Corp. purchased 70% of the outstanding shares of Sand Ltd. on Jenuery 1 Year 2, at a cost of $83,090 Paper has always used the equity method to account for its investments. On January 1, Year 2. Sand had common shares of $50000 and retained e $25,800, and fair values were equal to carrying amounts for all its net assets, except inventory fair value was $4200 less than carrying amount) and equipment (fair value was $12.900 greater than carrying amount The equipment, which is used for rese had an estimated remaining life of six years on January 1 Year 2 The following are the financial statements of Paper Corp. and its subsidiary Sand Ltd. as at December 31, Year S BALANCE SHEETS At December 31, Year 5 Piper Sand Cash 17,000 Accounts receivable 39,500 29,200 Note receivable. 39,700 Inventory 76,500 47,500 Equipment (net) 253,000 19,500 Land 176,000 37.000 Investment in Sand 122,206 $671,206 $249,900 Bank indebtedness $130,760 Accounts payable: 64,000 62,400 Notes payable 39,700 Common shares 150,000 50,000 Retained earnings 206,346 137,500 5671,206 $249,900 INCOME STATEMENTS For the year ended December 31, Tear 5 Sales Paper 5826,000 Sand 321,600 Management fee revenue Equity method income from Sand 19,200 1,674 Interest income. 3,970 Gain on sale of land Cost of sales Research and development expenses Interest expense Mieralnane avansa 23,700 $46,874 349.210 495,600 214,400 43,500 14,000 15,600 115 MA 16 NO 2 #3 E 4 < Prev 3 of 6 Next > % MacBook Pro 5 6 7 R T Y 2