KINDLY I NEED A DETAILED SOLUTION OF THE FOLLOWING PROBLEM

On January 1, Year 5, Peach Company purchased 80% of the shares of Strawberry for $ 900,000. On that date, Strawberrys shareholders equity consisted of $400,000 of common shares and $570,000 of retained earnings. This figure included existing goodwill of $35,000.

The carrying value of Salts identifiable net assets was equal to their fair values except:

The equipment has a 10-year remaining useful life and the patent had 10 years remaining. Both are amortized using straight line amortization.

During Year 8, a goodwill impairment loss of $13,000 occurred. During Year 10, a goodwill impairment loss of $15,000 occurred.

The tax rate for both firms is 30%, and Pillar uses the FVE and cost methods to account for its investment. Note that Salt paid dividends.

Financial statements for Year 10 are below:

Statement of Financial Position

December 31, Year 10

Other information:

1. Intercompany sales: On January 1, Year 10:

Strawberry had on hand $25,000 of inventory purchased from Peach. Peach had on hand $90,000 of inventory purchased from Strawberry.

Both companies use a gross profit of 40% of sales. During Year 10, Peach sold $179,000 of goods to Strawberry. On December 31, Year 10, 40% of the goods were unsold.

During year 10, Strawberry sold $775,000 of goods to Peach. On December 31, Year 10, 10% were unsold. Both companies have a gross profit on sales of 40%. There were no other intercompany sales.

During Year 6, Peach sold land to Strawberry at a profit of $65,000. Strawberry still owns the land.

Required:

Prepare all the calculations required to prepare consolidated financial statements.

1. Calculate the acquisition differential, goodwill, and NCI, and prepare the ADA table.

2. Calculate unrealized inventory profits before and after tax.

3. Calculate consolidated net income and the NCI share.

4. Calculate consolidated retained earnings and NCI Balance Sheet.

Prepare a consolidated income statement for Year 10 that includes a section below net income attributing income to shareholders of Pillar and NCI shareholders. Prepare a consolidated balance sheet for Year 10. Prepare statements in good form

InventoryEquipmentPatentBookValue26,000.006,000.00FairValue35,000.0095,000.0025,000.00 Income Statements Year ended December 31, Year 10 InventoryEquipmentPatentBookValue26,000.006,000.00FairValue35,000.0095,000.0025,000.00 Income Statements Year ended December 31, Year 10