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 $530,000 and retained earnings of $230,000. On that date, the inventory of Small was undervalued by $59,000, and a patent with an estimated remaining life of five years was overvalued by $84,000. Small reported the following subsequent to January 1, Year 6: Year 6 Year 7 Year 8 Profit (Loss) $ 132,000 (48,000) 103,000 Dividends $38,000 23,000 53,000 A test for goodwill impairment on December 31, Year 8, indicated a loss of $20,600 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 $ 630,000 330,000 (57,000) $ 903,000 Required: (a) Prepare the cost method journal entries of Large for each year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Year 6 Year 6 View transaction list Journal entry worksheet 1 2 > To record the purchase of 70% of Small Company. Note: Enter debits before credits. Date General Journal Debit Credit Year 6 Investment in Small 630,000 Cash 630,000 Record entry Clear entry View general journal Year 7 View transaction list Journal entry worksheet To record dividend received from Small Company. Note: Enter debits before credits. Date General Journal Debit Credit Year 7 16,100 Dividend income 16,100 Record entry Clear entry View general Journal Year 8 View transaction list Journal entry worksheet To record dividend received from Small Company. Note: Enter debits before credits Date General Journal Debit Credit Year 8 37,100 Cash Dividend income 37,100 Record entry Clear entry View general journal (b) Compute the following on the consolidated financial statements for the year ended December 31, Year 8: (Omit $ sign in your response.) (i) Goodwill Goodwill $ 115000 (ii) Non-controlling interest on the statement of financial position Non-controlling interest 270000 (iii) Retained earnings, beginning of year Retained earnings, beginning of year $ (iv) Profit attributable to Large's shareholders Profit attributable to Large's shareholders $ (v) 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. (i) Prepare Large's journal entries for each year related to its investment in Small. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Year 6 View transaction list Journal entry worksheet To record the purchase of 70% of Small Company. Note: Enter debits before credits. Date General Journal Debit Credit Year 6 Record entry Clear entry View general Journal