O$$Sullivan Corp. purchased $75\%$ of the outstanding shares of Rabb Ltd$.$ on January $1,$ Year $3,$ at a cost of $$121,680.$ Non$-$controlling interest was valued at $$41,000$ by an independent business valuator at the date of acquisition. On that date, Rabb had common shares of $$53,000$ and retained earnings of $$33,000.$ Fair values were equal to carrying amounts for all the net assets except the following:

Carrying Amount Fair Value

Inventory $ $33,000$ $ $20,500$

Equipment $45,60070,500$

Software $16,500$

The equipment had an estimated remaining useful life of six years on January $1,$ Year $3,$ and the software was to be amortized over ten years. Foxx uses the cost method to account for its investment. The testing for impairment at December $31,$ Year $6,$ yielded the following fair values:

Software $ $8,600$

Goodwill $34,493$

The impairment loss on these assets occurred entirely in Year $6.$ Amortization expense is grouped with administrative expenses, and impairment losses are grouped with miscellaneous expenses. The parent$$s share of the goodwill noted above is $$25,632.$

The following are the financial statements of O$$Sullivan Corp. and its subsidiary Rabb Ltd$.$ for Year $6$:

BALANCE SHEETS

At December $31,$ Year $6$

O$$Sullivan Corp. Rabb Ltd$.$

Cash $ $ $10,300$

Accounts receivable $43,00033,000$

Note receivable $43,000$

Inventory $69,00047,000$

Equipment, net $235,00079,000$

Land $165,00033,000$

Investment in Rabb $121,680$

$ $633,680$ $ $245,300$

Bank indebtedness $ $105,000$ $

Accounts payable $73,00063,000$

Notes payable $43,000$

Common shares $153,00053,000$

Retained earnings $259,680129,300$

$ $633,680$ $ $245,300$

STATEMENTS OF RETAINED EARNINGS

Year ended December $31,$ Year $6$

O$$Sullivan Corp. Rabb Ltd$.$

Retained earnings, January $1,$ Year $6$ $ $168,000$ $ $107,000$

Net income $125,77548,000$

Dividends $(34,095)(25,700)$

Retained earnings, December $31,$ Year $6$ $ $259,680$ $ $129,300$

INCOME STATEMENTS

For the year ended December $31,$ Year $6$

O$$Sullivan Corp. Rabb Ltd$.$

Sales $ $824,000$ $ $329,000$

Investment income $19,2755,100$

$843,275334,100$

Cost of sales $483,000203,000$

Administrative expenses $41,50013,500$

Miscellaneous expenses $119,00034,600$

Income taxes $74,00035,000$

$717,500286,100$

Net income $ $125,775$ $ $48,000$

Additional Information

The notes payable are intercompany.

Required:

$($a$)$ Prepare the Year $6$ consolidated financial statements. $($Input all values as positive numbers. Leave no cells blank $-$ be certain to enter $"0"$ wherever required. Round your intermediate computations to nearest whole dollar value. Omit $ sign in your response. The balance sheet total may vary due to rounding.$)$

O$$Sullivan Corp.

Statement of Consolidated Retained Earnings

Year ended December $31,$ Year $6$

$($Click to select$)$

$

$($Click to select$)$

$($Click to select$)$

$($Click to select$)$

$

$($b$)$ Calculate goodwill impairment loss and non$-$controlling interest on the consolidated income statement for the year ended December $31,$ Year $6,$ under the identifiable net assets method. $($Round intermediate calculations and final answers to whole number. Omit $ sign in your response.$)$

Goodwill impairment loss $

NCI $$ identifiable net assets method

$($c$)$ This part of the question is not part of your Connect assignment.