On January 1, 2016, Pat Incorporated paid $500,000 for80% of Sum Company's outstanding ordinary shares. Sum reported ordinary shares on that date of $200,000, premium 80,000 and retained earnings of $120,000. Equipment which had a six-years remaining life, were undervalued in Sum's financial records by $60,000, inventory was undervalued in Sum by of $30,000 and land understated by $55,000. Any remaining fair value/book value differential is allocated to goodwill. Sumer's net inter company sales, ending inventory, income and dividends paid the first three years that Pat owned them are shown below.

Question four: (25 marks) On January 1, 2016, Pat Incorporated paid $500,000 for80% of Sum Company's outstanding ordinary shares. Sum reported ordinary shares on that date of $200,000, premium 80,000 and retained earnings of $120,000. Equipment which had a six-years remaining life, were undervalued in Sum's financial records by $60,000, inventory was undervalued in Sum by of $30,000 and land understated by $55,000. Any remaining fair value/book value differential is allocated to goodwill. Sumer's net intercompany sales, ending inventory, income and dividends paid the first three years that Pat owned them are shown below. Sales to Sum sales to Pat ending inventory income dividend 2016 100,000 20,000 80,000 30,000 240,000 60.000 90,000 10,000 2018 360,000 90.000 60,000 20000 2017 If parent sold goods at 25% gross profit and subsidiary sold its good at 20% markup. Required: 1- Calculate the adjusted income for every year? 2- Journalize the entry of income and dividend in parent books for all years? 3- Prepare the elimination entries for 2018? 4- Calculate the investment and non-controlling in31/12/2018