Assume that Primary issued $530,000 bonds and used the proceeds to purchase 80% of Secondary Companys outstanding voting common stock on January 2, 208. At

Assume that Primary issued $530,000 bonds and used the proceeds to purchase 80% of Secondary Company’s outstanding voting common stock on January 2, 20Χ8. At that date, the fair value of the noncontrolling interest was $120,000. Primary then uses the (fully adjusted) equity method to account for its investment in Secondary for internal reporting purposes.

Additional information for Secondary as of January 2, 20Χ8:

(1) Buildings and equipment have 10 years of remaining useful life and are to be depreciated using the straight-line method with no residual value.

(2) Patent has 5 years of remaining useful life and is to be amortized using the straight-line method with no residual value.

(3) Bonds payable is due in 5 years. Premiums or discounts are amortized using the straight-line method.

At the end of 20Χ8, Primary determines that the goodwill resulted from the acquisition of Secondary is impaired and should be written down by $8,000. Goodwill and its impairment are to be allocated proportionately to the controlling and noncontrolling interests.

20Χ9 financial statements (in thousands) for Primary and Secondary are as follows, respectively.

	Primary	Secondary
Income Statement (20Χ9)
Sales	390	240
Cost of goods sold	273	144
Depreciation expense	55	45
Interest expense	36	6
Investment income from Secondary	?
Net Income	?	45
Statement of Retained Earnings
Balance, 1/1/Χ9	136	170
Net income	?	45
Dividends	20	40
Balance, 12/31/Χ9	?	175
Balance Sheet
Assets:
Cash and A/R (net)	230	124
Receivable from Secondary	6
Inventory	88	97
Investment in Secondary	?
Land	55	50
Buildings & Equipment (net)	439	360
Total Assets	?	631
Liab. & SE:
Accounts payable	40	20
Payable to Primary		6
Bonds payable	720	100
Common stock	400	330
Retained earnings	?	175
Total Liab. & SE	?	631

Required: Determine the dollar amount for the following items

a. The amount of Goodwill at acquisition?

b. On Primary's 20X9 internal financial statements:

1. Investment income from Secondary?

2. Investment in Secondary?

c.On the Primary and Secondary 20X9 consolidated income statement:

1. Cost of goods sold?

2. Depreciation Expense?

3. Amortization Expense?

4. Interest Expense?

5. Investment income from Secondary?

6. Consolidated net income?

7. Consolidated net income attributable to NCI?

8. Consolidated net income attributable to CI?

d. On the Primary and Secondary 20Χ9 consolidated statement of retained earnings:

1. Dividends?

2. Retained earnings as of 12/31/X9?

e. On the Primary and Secondary 20X9 consolidated balance sheet:

1. Receivable from Secondary?

2. Inventory?

3. Investment in Secondary?

4. Land?

5. Buildings and equipment (net)?

6. Patent?

7. Goodwill?

8. Payable to Primary?

9. Bonds payable?

10. Common stock?

11. NCI in net assets of Secondary?