On December 31, Year 1, Company A purchased 75% of Company B's outstanding common shares for $150,000 in cash. On that date, the carrying amount of Company B's assets and liabilities approximated their fair value, and the fair value of the noncontrolling interest (NCI) was $12,000. The following is the summarized balance sheet information for the two companies on December 31, Year 1, before the acquisition. Company A Company B Current assets $200,000 $ 80,000 Noncurrent assets 320,000 140,000 Current liabilities 70,000 45,000 Noncurrent liabilities 110,000 55,000 Common stock 100,000 30,000 Retained earnings 90,000 70,000 Additional paid-in capital 150,000 20,000 Additional information: Company B reported net income of $60,000 for the year ended December 31, Year 2. On December 1, Year 2, Company B declared and distributed a cash dividend of $40,000 to its Company B reported net income of $60,000 for the year ended December 31, Year 2. On December 1, Year 2, Company B declared and distributed a cash dividend of $40,000 to its common shareholders. On November 15, Year 2, Company A declared and distributed a cash dividend of $25,000 to its common shareholders. Company A reported net income of $110,000 in its separate statements for the year ended December 31, Year 2. In its separate statements, Company A accounts for its investment in Company B using the equity method. During Year 2, no shares of common stock were issued and no items of other comprehensive income were recognized either by Company A or by Company B. No intraentity transactions occurred during Year 2. Use the information above to prepare Company A's consolidated statement of changes in equity for the year ended December 31, Year 2. Enter a positive amount for an increase in the consolidated equity balance and a negative amount for a decrease in the consolidated equity balance. Enter the appropriate amounts in the designated cells below. Indicate negative numbers by using a. leading minus (-) sign. If no entry is necessary, enter a zero (0) or leave the cell blank. Company A Consolidated Statement of Changes in Equity Use the information above to prepare Company A's consolidated statement of changes in equity for the year ended December 31, Year 2. Enter a positive amount for an increase in the consolidated equity balance and a negative amount for a decrease in the consolidated equity balance. Enter the appropriate amounts in the designated cells below. Indiche negative numbers by using a leading minus (-) sign. If no entry is necessary, enter a zero (0) or leave the cell blank. Company A Consolidated Statement of Changes in Equity for the Year Ended December 31, Year 2 Shareholders' Equity Total Equity Retained Earnings Common Stock Additional Paid-in Capital Nonco Int 123 123 123 1-4. January 1, Year 2 $352,000 123 123 123 5 - 8. Dividends (35,000) Shareholders' Equity Additional Noncont Total Equity Retained Earnings Common Stock Paid-in Capital Inter 123 123 123 1 - 4. January 1, Year 2 $352,000 I 123 123 123 5 - 8. Dividends (35,000) 123 123 123 9 - 12. Net income (loss) 125,000 December 31, Year 2 $442,000 $175,000 $100,000 $150,000 $17, Jse the information above to determine the amount of goodwill or gain from bargain purchase ornanizer hy Comnany Aon the hucinace combination date Shareholders' Equity Additional Paid-in Capital Noncontrolling Interest Total Equity Retained Earnings Common Stock 123 123 123 123 nuary 1, Year 2 $392,000 123 123 123 123 vidends (35,000) 123 123 123 123 let income (loss) 125,000 $175,000 $442,000 $100,000 $150,000 $17,000 per 31, Year 2 information above to determine the amount of goodwill or gain from bargain purchase odhuromnany Ann the business combination date
