Mojo bought its investment in Toad for $105,000 on June 30, 2020. At that date, the stockholders' equity of Toad comprised common stock of $50,000, additional paid-in capital of $20,000, and retained earnings of $5,000. At the acquisition date, book value equaled fair value for Toad's assets and liabilities except for the following assets: Mojo Value Book Value Fair Value Inventory $20,000 $25,000 Equipment 70,000 50,000 30,000 Investments 35,000 The inventory was sold in 2020. The investments were sold on December 31, 2023. The equipment had a remaining five-year useful life from the acquisition date and is still owned. Goodwill, if any, is not impaired. The minority interest was valued at $22,000 at the acquisition date. Taxation issues may be ignored. Mojo bills Toad $2,000 a month for management fees under a management contract. Management fees for December 2023 will be paid by Toad in January 2024. All accounting for these fees has been correctly performed by both parties. To Complete: a) Complete a consolidated worksheet. b) In your submitted workings show the computation of the following directly: i) the investment in the subsidiary and the investment income computed on an equity basis ii) the non-controlling interest and the non-controlling interest in income. COST METHOD WORKSHEET INCOME STATEMENT Mojo Toad Operating income (60,000) (160,000) Adjustments Consolidated 28,000 Expenses Management fees General expenses Depreciation Net gain on sale Interest Total expenses Dividend income 24,000 88,000 8,000 (10,000) 5,000 115,000 10,000 38,000 (8,000) Net income (30,000) (45,000) MOVEMENTS ON RETAINED EARNINGS Retained earnings 1.1 (24,000) (55,000) Net income for the year (30,000) (45,000) (54,000) (100,000) Dividends paid 2,000 10,000 Retained earnings 12.31 (52,000) (90,000) Mojo Toad Adjustments Consolidated BALANCE SHEET Cash Accounts receivable 15,000 8,000 28,000 90,000 Equipment less acc.depreciation 140,000 (38,000) Investment Total Accounts payable 105,000 128,000 (26,000) 220,000 (60,000) Stockholders equity Common stock Paid in Capital Retained earnings (20,000) (30,000) (52,000) (50,000) (20,000) (90,000) Total (128,000) (220,000) Mojo bought its investment in Toad for $105,000 on June 30, 2020. At that date, the stockholders' equity of Toad comprised common stock of $50,000, additional paid-in capital of $20,000, and retained earnings of $5,000. At the acquisition date, book value equaled fair value for Toad's assets and liabilities except for the following assets: Mojo Value Book Value Fair Value Inventory $20,000 $25,000 Equipment 70,000 50,000 30,000 Investments 35,000 The inventory was sold in 2020. The investments were sold on December 31, 2023. The equipment had a remaining five-year useful life from the acquisition date and is still owned. Goodwill, if any, is not impaired. The minority interest was valued at $22,000 at the acquisition date. Taxation issues may be ignored. Mojo bills Toad $2,000 a month for management fees under a management contract. Management fees for December 2023 will be paid by Toad in January 2024. All accounting for these fees has been correctly performed by both parties. To Complete: a) Complete a consolidated worksheet. b) In your submitted workings show the computation of the following directly: i) the investment in the subsidiary and the investment income computed on an equity basis ii) the non-controlling interest and the non-controlling interest in income. COST METHOD WORKSHEET INCOME STATEMENT Mojo Toad Operating income (60,000) (160,000) Adjustments Consolidated 28,000 Expenses Management fees General expenses Depreciation Net gain on sale Interest Total expenses Dividend income 24,000 88,000 8,000 (10,000) 5,000 115,000 10,000 38,000 (8,000) Net income (30,000) (45,000) MOVEMENTS ON RETAINED EARNINGS Retained earnings 1.1 (24,000) (55,000) Net income for the year (30,000) (45,000) (54,000) (100,000) Dividends paid 2,000 10,000 Retained earnings 12.31 (52,000) (90,000) Mojo Toad Adjustments Consolidated BALANCE SHEET Cash Accounts receivable 15,000 8,000 28,000 90,000 Equipment less acc.depreciation 140,000 (38,000) Investment Total Accounts payable 105,000 128,000 (26,000) 220,000 (60,000) Stockholders equity Common stock Paid in Capital Retained earnings (20,000) (30,000) (52,000) (50,000) (20,000) (90,000) Total (128,000) (220,000)