Dotterel Corporation paid $200,000 cash for 40% of the voting common stock of Swamp Land Inc. on January 1, 2011. Book value and fair value information for Swamp on this date is as follows: Book Fair Assets Values Values Cash $60,000 $60,000 Accounts receivable 120,000 120,000 Inventories 80,000 100,000 Equipment 340,000 400,000 $ 600,000 $ 680,000 Liabilities & Equities Accounts payable $200,000 $200,000 Note payable 120,000 100,000 Capital stock 200,000 Retained earnings 80,000 $600,000 $300,000 Required: Prepare an allocation schedule for Dotterel's investment in Swamp Land. ( use following template ) Investment cost $ Book value acquired: $280,000 40% = Excess cost over book value acquired = Schedule to Allocate Cost-Book Value Differentials Fair value - Amount Book value Interest Assigned Inventories 40% Equipment 40% Notes payable 40% Allocated to specific assets Remainder allocated to goodwill Excess of cost over book value acquired 3.If a parent owns 80 percent of the voting stock of a subsidiary and the subsidiary in turn owns 20 percent of the stock of the parent, what kind of affiliation structure is involved? Explain. 4.Is the amount of intercompany profit to be eliminated from consolidated financial statements affected by the existence of a noncontrolling interest? Explain 5.How is the computation of noncontrolling interest share affected by downstream sales of land? By upstream sales of land? 6.What are constructive gains and losses? Describe a transaction having a constructive gain. A summary of changes in the stockholders equity of Sin Corporation from January 1, 2011, to December 31, 2012, appears as follows (in thousands): (see attached) Par Corporation purchases 40,000 shares of Sins outstanding stock on July 1, 2011, in the open market for $620,000 and an additional 10,000 shares directly from Sin for $162,000 on January 1, 2012. Any excess of investment fair value over book value is due to goodwill. REQUIRED 1. Determine the balance of Pars Investment in Sin account on December 31, 2011. 2. Compute Pars investment income from Sin for 2012. 3. Determine the balance of Pars Investment in Sin account on December 31,2012.

\fCapital Stock 10 $ Par Bal Jan 1, 2011 Dividends Dec 2011 Income 2011 Balance Dec 31, 2011 $500 Sale of Stock Jan 1, 2012 Dividends Dec 2012 Income 2012 Bal Dec 31, 2012 $100 Add paid in Capital Total Equity $50 -50 100 $100 $500 $600 Ret Earn $550 -50 100 $600 -60 150 $190 $162 ($60) $150 $852 $62 $62