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Large Ltd. purchased 80% of Small Company on January 1, Year 6, for $760,000, when the statement of financial position for Small showed common shares
Large Ltd. purchased 80% of Small Company on January 1, Year 6, for $760,000, when the statement of financial position for Small showed common shares of $550,000 and retained earnings of $250,000. On that date, the inventory of Small was undervalued by $70,000, and a patent with an estimated remaining life of five years was overvalued by $88,000. Small reported the following subsequent to January 1, Year 6: Year 6 Year 7 Year 8 Profit (Loss) $140,000 (50,000) 105,000 Dividenda $40,000 25,000 55,000 A test for goodwill impairment on December 31, Year 8, indicated a loss of $20,800 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 $ 650,000 350,000 (55,000) $ 945,000 (b) Compute the following on the consolidated financial statements for the year ended December 31, Year 8: (Omit $ sign in your response.) (0) Goodwill Goodwill $ (11) Non-controlling interest on the statement of financial position Non-controlling interest $ (ill) Retained earnings, beginning of year Retained earnings, beginning of year $ (iv) Profit attributable to Large's 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 ioural antrian for
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