Inment Saved Help Save & Large Ltd. purchased 70% of Small Company on January 1 Year 6 for $630,000, when the statement of financial position for Small showed common shares of $410,000 and retained earnings of $110.000. On that date the inventory of Small was undervalued by $41,000, and a patent with an estimated remaining life of five years was overvalued by $60,000 Small reported the following subsequent to January 1 Year 6. Profit (less) Dividends $ 84,690 $26, (36,000) 11,600 Year 8 91, eee 41,000 Year 6 Year 7 A test for goodwill impairment on December 31, Year 8. indicated a loss of $19.400 should be reported for Year 8 on the consolidated income statement. Large uses the cost method to account for its investment in Small and reported the following for Year 8 for its separate-entity statement of changes in equity Retained earnings, beginning Profit Dividends Retained earnings, end $ 510.000 210,000 16.000 652.000 Required: P 1 of 1 NO O 5 Assignment Required: (a) Prepare the cost method journal entries of Large for each year (Omit sign in your response.) Year 6 Debit 630000 Credit General Journal Investment in Small Cash To record the purchase of her of Small Company 630000 26000 Cash Dividend income To record dividend received from Small Company 26000 Year 7 General Journal Debit Credit Cash Dividend income To record dividend received from Small Company Year 8 ---- Prov 1 of 1 Nad signment Help Sa Year 8 Debit Credit General Journal Cash Dividend income To record dividend received from Small Company (b) Compute the following on the consolidated financial statements for the year ended December 31, Year 8. (Omit S sign in your response.) Goodwill Goodwill (ii) Non-controlling interest on the statement of financial position Non-controlling interest $ (1) Retained earnings, beginning of year Retained earnings, beginning of year SI (iv) Profit attributable to Large's shareholders 1 of 1 o c Assignment and Help Save & Che IV) Proti attributable to Larges shareholders Profit attributable to Large's shareholders (M) Profit attributable to non controlling interest Profit attributable to non controlling interest $ (c) Now assume that Large is a private entity, uses ASPE, and chooses to use the equity method to report its investment in Small Prepare Large's journal entries for each year related to its investment in Small (Omit 5 sign in your response) Year 6 General Journal Debit Credit Click to select Click to select To record the purchase of yox of Small Company liclick to select) Click to select To record 70% of Small Company year 6 net income Click to select [Click to select To record 70% of the dividend received from all company To record 7e of the dividend received from Sall Company (Ckck to select) (Click to select) To record dex of acquisition differential mortization and impairment of year 6 Year 7 Debit Credit General Joure (Click to select) (Click to select) To record 70% of small company year 7 met loss (Click to select) (Click to select) To record 70% of the dividend received from Small Company (Click to select) (Click to select) To record yok of acquisition differential mortization and impairment of year 7 Year 8 Debit Credit General Journal Click to select Prey Nerd (Click to select) (Click to select) To record 70% of acquisition differential amortization and impairment of year 7 Year 8 Credit General Journal Debit (Click to select) (Click to select) To record 7ex of Small Company year 8 net income (Click to select) (Click to select) To record 70% of the dividend received from Small Company (Click to select) (Click to select) To record 70% of acquisition differential mortization and impairment of year 8 m) Determine the investment in Small at December 31. Year 8. (Omit S sign in your response.) Investment in Small under equity method PE o C