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On December 31, Year 3, Tim Corp. acquired 80% of the outstanding shares of Hortins Inc. for a total cost of $245,000. The carrying amount

On December 31, Year 3, Tim Corp. acquired 80% of the outstanding shares of Hortins Inc. for a total cost of $245,000. The carrying amount of Hortinss assets, liabilities, and equity was equal to fair value except for the following:

Carrying Amount

Fair Value

Inventory

$ 60,500

$ 69,000

Equipment, net

275,000

281,000

Patent

41,000

Long-term debt

185,000

161,000

Common shares

180,000

Retained earnings

43,000

As at December 31, Year 3, the equipment and patent had an estimated useful life of six and eight years, respectively. The long-term debt is due on January 1, Year 9. There was a goodwill impairment loss of $3,000 in Year 5. There were no other impairment losses.

Tim uses the cost method to account for its investment in Hortins. The book values of selected accounts for the year ended December 31, Year 7 were as follows:

Tim

Hortins

Dividend income

$

12,500

Net income

63,000

$

27,000

Common shares

102,500

180,000

Retained earnings

260,000

120,000

Show a schedule of changes to the acquisition differential for the four year period ending December 31, Year 7.

Also how do you Calculate consolidated net income attributable to the parent, ending retained earnings and non-controlling interest at December 31, Year 7.

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