On 1 1 2019, America Corp bought a 15 interest in Australia Corp The acquisition price of $195,000 reflected an assessment that all of Australias accounts were fairly valued within the accounting records During 2019, Australia reported net income of $100,000 and paid cash dividends of $30,000 America possessed the ability to influence significantly Australias operations, and therefore, accounted for this investment using the equity method On 1 1 2020, America acquired an additional 80 for $1,500,000 cash The consideration transferred by America in its second acquisition of Australia represents the best available evidence for measuring the fair value of Australia Corp at 1 1 2020 Also, as of 1 1 2020, America assessed a $400,000 value to an unrecorded customer contract recently negotiated by Australia The customer contract is anticipated to have a remaining life of 4 years Australias other assets and liabilities were judged to have fair values equal to their book values America elects to continue applying the equity method to this investment for internal reporting purposes Required Calculate the following amounts on America pre consolidation 2020 statement (10 points) Investment in Australia Income in Australias earnings Gain (Loss) on Revaluation of Investment in Australia to fair value Calculate the balance of NCI at December 31, 2020 Provide detail calculations (5 points) Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2020 (25 points) At December 31, 2020, the following financial information is available for consolidation America Australia BALANCE SHEET December 31, 2020 December 31, 2020 177,500 550,000 0 Current Assets Investment in Australia Company Property, plant, and equipment Patented Technology 826,000 850,000 610,000 410,000 1,570,000 Total Assets Liabilities Common Stock APIC R E January 1, 2020 Net Income Dividend Paid 1,300,000 900,000 180,000 965,000 (140,000) 90,000 550,000 220,000 600,000 150,000 (40,000) 1,570,000 Total Liabilities Equity INCOME STATEMENT America Australia 2020 2020 Revenue Operating Expenses Income in Australia's earning Gain(Loss) on revaluation of Investment in Australia to fair value 931,000 (615,000) 380,000 (230,000) Net Income 150,000

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On 1/1/2019, America Corp. bought a 15% interest in Australia Corp. The acquisition price of $195,000 reflected an assessment that all of Australias accounts were

On 1/1/2019, America Corp. bought a 15% interest in Australia Corp. The acquisition price of $195,000 reflected an assessment that all of Australias accounts were fairly valued within the accounting records. During 2019, Australia reported net income of $100,000 and paid cash dividends of $30,000. America possessed the ability to influence significantly Australias operations, and therefore, accounted for this investment using the equity method.

On 1/1/2020, America acquired an additional 80% for $1,500,000 cash. The consideration transferred by America in its second acquisition of Australia represents the best available evidence for measuring the fair value of Australia Corp. at 1/1/2020.

Also, as of 1/1/2020, America assessed a $400,000 value to an unrecorded customer contract recently negotiated by Australia. The customer contract is anticipated to have a remaining life of 4-years. Australias other assets and liabilities were judged to have fair values equal to their book values. America elects to continue applying the equity method to this investment for internal reporting purposes.

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Required:

Calculate the following amounts on America pre-consolidation 2020 statement (10 points):
1. Investment in Australia
2. Income in Australias earnings
3. Gain (Loss) on Revaluation of Investment in Australia to fair value
Calculate the balance of NCI at December 31, 2020. Provide detail calculations (5 points).
Prepare a worksheet to consolidate the financial statements of these two companies as of December 31, 2020 (25 points).

At December 31, 2020, the following financial information is available for consolidation: America Australia BALANCE SHEET December 31, 2020 December 31, 2020 177,500 550,000 ? 0 Current Assets Investment in Australia Company Property, plant, and equipment Patented Technology 826,000 850,000 610,000 410,000 1,570,000 Total Assets ? Liabilities Common Stock APIC R/E January 1, 2020 Net Income Dividend Paid 1,300,000 900,000 180,000 965,000 ? (140,000) 90,000 550,000 220,000 600,000 150,000 (40,000) 1,570,000 Total Liabilities + Equity ? INCOME STATEMENT America Australia 2020 2020 Revenue Operating Expenses Income in Australia's earning Gain(Loss) on revaluation of Investment in Australia to fair value 931,000 (615,000) ? 380,000 (230,000) ? Net Income ? 150,000