On January 1, Year 7, the Parent Company purchased 90,000 of the 100,000 ordinary shares of the Subsidiary Company for $80 per share. On that date, Subsidiary had ordinary shares of $3,400,000, and retained earnings of $2,000,000. There were also internally generated Patent with an estimated market value of $500,000 and a 4 -year remaining life. A long-term liability had a market value $230,000 greater than carrying amount this liability was paid off December 31 , Year 9 . All other identifiable assets and liabilities of Subsidiary had fair values equal to their carrying amounts. Subsidiary's accumulated depreciation on the plant and equipment was $500,000 at the date of acquisition. The year 11 financial statements for Parent and Subsidiary were as follows: On January 1, Year 7, the Parent Company purchased 90,000 of the 100,000 ordinary shares of the Subsidiary Company for $80 per share. On that date, Subsidiary had ordinary shares of $3,400,000, and retained earnings of $2,000,000. There were also internally generated Patent with an estimated market value of $500,000 and a 4 -year remaining life. A long-term liability had a market value $230,000 greater than carrying amount this liability was paid off December 31 , Year 9 . All other identifiable assets and liabilities of Subsidiary had fair values equal to their carrying amounts. Subsidiary's accumulated depreciation on the plant and equipment was $500,000 at the date of acquisition. The year 11 financial statements for Parent and Subsidiary were as follows: Additional Information - Both companies use the straight-line method for all depreciation and amortization calculations and the FIFO inventory cost flow assumption. Assume a 30% income tax rate on all applicable items, Goodwill was impaired by $400,000 in Year 9 and by $410,000 in year 11 , - On September 1, Year 11, Subsidiary sold a parcel of land to Parent and recorded a total non-operating gain of $500,000. - Sales of finished goods from Parent to Sutridiary totalled $1,170,000 in Year 10 and $2,040,000 in Year 11 . These sales were priced to provide a gross profit margin on selling price of 25% to the Parent Company. Subsidiary's December 31 , Year 10 . inventory contained $360,000 of these sales; December 31, Year 11 , inventory contained $610,000 of these sales. - Sales of finished goods from Subsidiary to Parent were $930,000 in Year 10 and $970,000 in Year 11 . These sales were priced to provide a gross profit margin on selling price of 30% to the Subsidiary Company. Parent's December 31 , Year 10 , inventory contained $190,000 of these sales; the December 31, Year 11 , inventory contained $570,000 of these sales. - The amount still owing by Subsidiary on inventory purchases is $210,000. - Parent's investment in Subsidiary's account is carried in accordance with the cost method and includes advances to Subsidiary of $300,000, which are also included in current liabilities. - There are no intercompany amounts other than those noted, except for the dividends of $470,000 (total amount) declared and paid by Subsidiary. - Method for adjusting depreciation at acquisition is the net method. Required: (a) Calculate the acquisition differential and goodwill at acquisition. (Leave no cells blank-be certain to enter "O" wherever required. Negative amounts should be indicated with a minus sign.) (a) Calculate the acquisition differential and goodwill at acquisition. (Leave no cells blank-be certain to enter " 0 " wherever required. Negative amounts should be indicated with a minus sign.) (b) Calculate the NCl at acquisition. (c) Changes to Acquisition Differential. (Leave no cells blank - be certain to enter "O" wherever required. Negative amounts should be indicated with a minus sign.) (d) Calculate the Intercompany Profits for year 11 . (e) Calculate the Net income for year 11 the portion attributable to Shareholders of Parent and the NCl. (Negative amounts should be indicated with a minus sign.) (f) Calculation of Ending Retained Earnings End Y11. (Leave no cells blank - be certain to enter " O" wherever required. Negative amounts should be indicated with a minus sign.) (g) Calculate the NCl'at Decemebr 31st, year 11 . (h) Prepare the Consolidated Income Statement and Statement of Financial Position at the end of year 11. (Leave no cells blank - be certain to enter "O" wherever required. Negative amounts should be indicated with a minus sign.) On January 1, Year 7, the Parent Company purchased 90,000 of the 100,000 ordinary shares of the Subsidiary Company for $80 per share. On that date, Subsidiary had ordinary shares of $3,400,000, and retained earnings of $2,000,000. There were also internally generated Patent with an estimated market value of $500,000 and a 4 -year remaining life. A long-term liability had a market value $230,000 greater than carrying amount this liability was paid off December 31 , Year 9 . All other identifiable assets and liabilities of Subsidiary had fair values equal to their carrying amounts. Subsidiary's accumulated depreciation on the plant and equipment was $500,000 at the date of acquisition. The year 11 financial statements for Parent and Subsidiary were as follows: On January 1, Year 7, the Parent Company purchased 90,000 of the 100,000 ordinary shares of the Subsidiary Company for $80 per share. On that date, Subsidiary had ordinary shares of $3,400,000, and retained earnings of $2,000,000. There were also internally generated Patent with an estimated market value of $500,000 and a 4 -year remaining life. A long-term liability had a market value $230,000 greater than carrying amount this liability was paid off December 31 , Year 9 . All other identifiable assets and liabilities of Subsidiary had fair values equal to their carrying amounts. Subsidiary's accumulated depreciation on the plant and equipment was $500,000 at the date of acquisition. The year 11 financial statements for Parent and Subsidiary were as follows: Additional Information - Both companies use the straight-line method for all depreciation and amortization calculations and the FIFO inventory cost flow assumption. Assume a 30% income tax rate on all applicable items, Goodwill was impaired by $400,000 in Year 9 and by $410,000 in year 11 , - On September 1, Year 11, Subsidiary sold a parcel of land to Parent and recorded a total non-operating gain of $500,000. - Sales of finished goods from Parent to Sutridiary totalled $1,170,000 in Year 10 and $2,040,000 in Year 11 . These sales were priced to provide a gross profit margin on selling price of 25% to the Parent Company. Subsidiary's December 31 , Year 10 . inventory contained $360,000 of these sales; December 31, Year 11 , inventory contained $610,000 of these sales. - Sales of finished goods from Subsidiary to Parent were $930,000 in Year 10 and $970,000 in Year 11 . These sales were priced to provide a gross profit margin on selling price of 30% to the Subsidiary Company. Parent's December 31 , Year 10 , inventory contained $190,000 of these sales; the December 31, Year 11 , inventory contained $570,000 of these sales. - The amount still owing by Subsidiary on inventory purchases is $210,000. - Parent's investment in Subsidiary's account is carried in accordance with the cost method and includes advances to Subsidiary of $300,000, which are also included in current liabilities. - There are no intercompany amounts other than those noted, except for the dividends of $470,000 (total amount) declared and paid by Subsidiary. - Method for adjusting depreciation at acquisition is the net method. Required: (a) Calculate the acquisition differential and goodwill at acquisition. (Leave no cells blank-be certain to enter "O" wherever required. Negative amounts should be indicated with a minus sign.) (a) Calculate the acquisition differential and goodwill at acquisition. (Leave no cells blank-be certain to enter " 0 " wherever required. Negative amounts should be indicated with a minus sign.) (b) Calculate the NCl at acquisition. (c) Changes to Acquisition Differential. (Leave no cells blank - be certain to enter "O" wherever required. Negative amounts should be indicated with a minus sign.) (d) Calculate the Intercompany Profits for year 11 . (e) Calculate the Net income for year 11 the portion attributable to Shareholders of Parent and the NCl. (Negative amounts should be indicated with a minus sign.) (f) Calculation of Ending Retained Earnings End Y11. (Leave no cells blank - be certain to enter " O" wherever required. Negative amounts should be indicated with a minus sign.) (g) Calculate the NCl'at Decemebr 31st, year 11 . (h) Prepare the Consolidated Income Statement and Statement of Financial Position at the end of year 11. (Leave no cells blank - be certain to enter "O" wherever required. Negative amounts should be indicated with a minus sign.)