Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(ii) Consolidated balance sheet as at December 31 , Year 12. Financial statements of Par Corp. and its subsidiary Star Inc. on December 31, Year

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
(ii) Consolidated balance sheet as at December 31 , Year 12. Financial statements of Par Corp. and its subsidiary Star Inc. on December 31, Year 12, are shown below: Other Information - On January 1, Year 5, the balance sheet or Star showed the following shareholders' equity: Note 1: Dividends on preferred shares are two years in arrears. in this date, Par acquired 1,400 common shares of Star for a cash payment of $280,000. he fair values of Star's identifiable net assets differed from carrying amounts only with respect to the following: The plant had an estimated remaining useful life of five years on this date, and the long-term liabilities had a maturity date of December 30, Year 12. Any goodwill is to be tested annualy for impairment. - Both Par and Star make substantial sales to each othec at an intercompany selling price that yields the same gross profit as the sales they make to unreloted customers. Intercompany sales in Year 12 were as follows: - During Year 12, Par billed Star \$2,000 per month in management fees. At year.end, Star had paid for all months except for December: - The January 1, Year 12 , inventories of the fwo companies contained unrealized intercompany profits as follows: (c) On January 1, Year 13, Star issued common shares for \$100,000 in cash. Because Par did not purchase any of these shares, Par's owrorohip percentage declined from 70 to 56x. Calculate the gain or loss that would be charged or credited to consobidated shareholders equity as b result of this transaction, finput all amounts as postive values. Round intermediate calculations and final answer to nearest dollar amount. Omit $ sign in your respense\}? - The December 31, Year 12 , inventories of the two companies contained unrealized intercompany profits as follows: - On July 1, Year 7, Star sold equipment to Par for $82,000. The equipment had a carrying amount in the records of $ tar of $60,000 on this date and an estimated remaining useful life of five years. - Goodwill impairment losses were recorded as follows: Year 7,\$92,500; Year 9, \$46,470; and Year 12,\$19,710. - Assume a 40% corporate tax rate. - Par has accounted for its investment in Star by the cost method. - All dividends in arrears were paid by December 31 , Year 11. Required: (a) Prepare, with all necessary calculations, the following: (9) Year 12 consolidated retained earnings statement. (input all amounts as positive values. Omit $ sign in your response.) (ii) Consolidated balance sheet as at December 31 , Year 12. Financial statements of Par Corp. and its subsidiary Star Inc. on December 31, Year 12, are shown below: Other Information - On January 1, Year 5, the balance sheet or Star showed the following shareholders' equity: Note 1: Dividends on preferred shares are two years in arrears. in this date, Par acquired 1,400 common shares of Star for a cash payment of $280,000. he fair values of Star's identifiable net assets differed from carrying amounts only with respect to the following: The plant had an estimated remaining useful life of five years on this date, and the long-term liabilities had a maturity date of December 30, Year 12. Any goodwill is to be tested annualy for impairment. - Both Par and Star make substantial sales to each othec at an intercompany selling price that yields the same gross profit as the sales they make to unreloted customers. Intercompany sales in Year 12 were as follows: - During Year 12, Par billed Star \$2,000 per month in management fees. At year.end, Star had paid for all months except for December: - The January 1, Year 12 , inventories of the fwo companies contained unrealized intercompany profits as follows: (c) On January 1, Year 13, Star issued common shares for \$100,000 in cash. Because Par did not purchase any of these shares, Par's owrorohip percentage declined from 70 to 56x. Calculate the gain or loss that would be charged or credited to consobidated shareholders equity as b result of this transaction, finput all amounts as postive values. Round intermediate calculations and final answer to nearest dollar amount. Omit $ sign in your respense\}? - The December 31, Year 12 , inventories of the two companies contained unrealized intercompany profits as follows: - On July 1, Year 7, Star sold equipment to Par for $82,000. The equipment had a carrying amount in the records of $ tar of $60,000 on this date and an estimated remaining useful life of five years. - Goodwill impairment losses were recorded as follows: Year 7,\$92,500; Year 9, \$46,470; and Year 12,\$19,710. - Assume a 40% corporate tax rate. - Par has accounted for its investment in Star by the cost method. - All dividends in arrears were paid by December 31 , Year 11. Required: (a) Prepare, with all necessary calculations, the following: (9) Year 12 consolidated retained earnings statement. (input all amounts as positive values. Omit $ sign in your response.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

elderly adults

Answered: 1 week ago