Financial statements of Champlain Ltd. and its 80% owned subsidiary Samuel Ltd. as at December 31 , Year 8 , are presented below. Additional Information: - Champlain acquired 8,000 ordinary shares of Samuel on January 1 , Year 4 , for $128,100. Samuel's shares were trading for $14 per share on the date of acquisition. The retained earnings and accumulated depreciation of Samuel were $12,600 and $18,200, respectively, on that date, and there have been no subsequent changes in the ordinary shares account. On January 1 , Year 4 , fair values were equal to carrying amounts except for the following: - The patent of Samuel had a remaining legal life of eight years on January 1, Year 4, and any goodwill was to be tested annually for impairment. As a result, impairment losses occurred as follows: - On January 1, Year 6, Samuel sold equipment to Champlain at a price that was $22,200 in excess of its carrying amount. The equipment had an estimated remaining life of six years on that date. - On January 1, Year 8, the inventories of Champlain contained items purchased from Samuel on which Samuel had made a profit of $3,100. During Year 8 , Samuel sold goods to Champlain for $93,200, of which $22,200 remained unpaid at the end of the year. Samuel made a profit of $3,300 on goods remaining in Champlain's inventory at December 31 , Year 8 . - On July 1, Year 8 , Champlain issued $25,000 of ordinary shares to a private investor. - Champlain sold a tract of land to Samuel in Year 5 at a profit of $8,200. This land is still held by Samuel at the end of Year 8. - Assume a corporate tax rate of 40%. (e) Prepare the consolidated financial statements using the worksheet approach. (Values In the flrst two columns and last column (the "parent", "subsldlary" and "consolldated" balences) that are to be deducted should be Indlcated with a minus slgn, while all values In the "Entry" columns should be entered as positive values. For accounts where multiple adjusting entrles are required, comblne all deblt entrles Into one amount and enter thls amount In the deblt column of the worksheet. Slmillerly, combine all credlt entrles Into one amount and enter thls amount in the credlt column of the worksheet. Leeve no cells blenk-be certaln to enter "O" wherever requlred. Omlt $ slgn In your response.) Financial statements of Champlain Ltd. and its 80% owned subsidiary Samuel Ltd. as at December 31 , Year 8 , are presented below. Additional Information: - Champlain acquired 8,000 ordinary shares of Samuel on January 1 , Year 4 , for $128,100. Samuel's shares were trading for $14 per share on the date of acquisition. The retained earnings and accumulated depreciation of Samuel were $12,600 and $18,200, respectively, on that date, and there have been no subsequent changes in the ordinary shares account. On January 1 , Year 4 , fair values were equal to carrying amounts except for the following: - The patent of Samuel had a remaining legal life of eight years on January 1, Year 4, and any goodwill was to be tested annually for impairment. As a result, impairment losses occurred as follows: - On January 1, Year 6, Samuel sold equipment to Champlain at a price that was $22,200 in excess of its carrying amount. The equipment had an estimated remaining life of six years on that date. - On January 1, Year 8, the inventories of Champlain contained items purchased from Samuel on which Samuel had made a profit of $3,100. During Year 8 , Samuel sold goods to Champlain for $93,200, of which $22,200 remained unpaid at the end of the year. Samuel made a profit of $3,300 on goods remaining in Champlain's inventory at December 31 , Year 8 . - On July 1, Year 8 , Champlain issued $25,000 of ordinary shares to a private investor. - Champlain sold a tract of land to Samuel in Year 5 at a profit of $8,200. This land is still held by Samuel at the end of Year 8. - Assume a corporate tax rate of 40%. (e) Prepare the consolidated financial statements using the worksheet approach. (Values In the flrst two columns and last column (the "parent", "subsldlary" and "consolldated" balences) that are to be deducted should be Indlcated with a minus slgn, while all values In the "Entry" columns should be entered as positive values. For accounts where multiple adjusting entrles are required, comblne all deblt entrles Into one amount and enter thls amount In the deblt column of the worksheet. Slmillerly, combine all credlt entrles Into one amount and enter thls amount in the credlt column of the worksheet. Leeve no cells blenk-be certaln to enter "O" wherever requlred. Omlt $ slgn In your response.)
