On January $1,$ Year $7,$ the Vine Company purchased $60,000$ of the $80,000$ ordinary shares of the Devine Company for $$80$ per share. On that date, Devine had ordinary shares of $$3,440,000,$ and retained earnings of $$2,170,000.$

When acquired, Devine had inventories with fair values $$30,000$ less than carrying amount, a parcel of land with a fair value $$270,000$ greater than the carrying amount, and equipment with a fair value $$270,000$ less than carrying amount. There were also internally generated patents with an estimated market value of $$470,000$ and a five$-$year remaining life. A long$-$term liability had a market value $$170,000$ greater than carrying amount; this liability was paid off December $31,$ Year $10.$ All other identifiable assets and liabilities of Devine had fair values equal to their carrying amounts. Devine$$s accumulated depreciation on the plant and equipment was $$570,000$ at the date of acquisition.

The year $11$ financial statements for Vine and Devine were as follows:

INCOME STATEMENTS

for year ending December $31,$ Year $11$

$($in thousands of dollars$)$

Vine Devine

Sales $ $13,000$ $ $4,400$

Dividends, investment income and gains $1,8002,400$

Total income $14,8006,800$

Cost of goods sold $10,1002,900$

Other expenses $500500$

Income taxes $200200$

Total expenses $(10,800)(3,600)$

Profit $ $4,000$ $ $3,200$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

STATEMENTS OF FINANCIAL POSITION

December $31,$ Year $11$

$($in thousands of dollars$)$

Vine Devine

Land $ $6,000$ $ $2,500$

Plant and equipment $20,20013,200$

Accumulated depreciation $(4,400)(3,600)$

Investment in Devine, cost $5,070$

Inventories $6,0003,800$

Cash and current receivables $2,3601,700$

Total assets $ $35,230$ $ $17,600$

Ordinary shares $ $10,000$ $ $3,440$

Retained earnings $10,6005,600$

Long$-$term liabilities $8,0002,500$

Deferred income taxes $1,600100$

Current liabilities $5,0305,960$

Total equity and liabilities $ $35,230$ $ $17,600$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Additional Information

$$ At the acquisition date, the equipment had an expected remaining useful life of ten years. Both companies use the straight$-$line method for all depreciation and amortization calculations and the FIFO inventory cost flow assumption. Assume a $40\%$ income tax rate on all applicable items and that there were no impairment losses for goodwill.

$$ On September $1,$ Year $11,$ Devine sold a parcel of land to Vine and recorded a total non$-$operating gain of $$470,000.$

$$ Sales of finished goods from Vine to Devine totalled $$1,070,000$ in Year $10$ and $$2,070,000$ in Year $11.$ These sales were priced to provide a gross profit margin on selling price of $33(1)/(3)\%$ to the Vine Company. Devine$$s December $31,$ Year $10,$ inventory contained $$321,000$ of these sales; December $31,$ Year $11,$ inventory contained $$621,000$ of these sales.

$$ Sales of finished goods from Devine to Vine were $$870,000$ in Year $10$ and $$1,270,000$ in Year $11.$ These sales were priced to provide a gross profit margin on selling price of $40\%$ to the Devine Company. Vine$$s December $31,$ Year $10,$ inventory contained $$170,000$ of these sales; the December $31,$ Year $11,$ inventory contained $$570,000$ of these sales.

$$ Vine$$s investment in Devine$$s account is carried in accordance with the cost method and includes:

o Acquisition cost of $60,000$ of the $80,000$ ordinary shares of the Devine Company for $$80$ per share for a total of $$4,800,000$ and

o Advances to Devine of $$270,000,$ which are also included in the current liabilities of Devine.

$$ There are no intercompany amounts other than those noted, except for the dividends of $$500,000($total amount$)$ declared and paid by Devine.

Required: Prepare in good form the following:

$1.$ A statement for the calculation and Allocation of the Acquisition Differential on the date of Vine$$s investment in Devine Jan $1,$ Year $7$

$2.$ What is the value of the NCI on Jan $1,$ Year $7$ the date of the acquisition?

$3.$ Acquisition Differential Amortization$/$ Impairment Schedule for the period ended December $31,$ Year $11$

$4.$ Schedule of Realized $/$ Unrealized Profit on Inter company Sales of Inventory for the Year ended December $31,$ Year $11$

$5.$ Schedule of Realized $/$ Unrealized Gain on Sale of Land for the period Dec $31,$ Year $11$

$6.$ Compute the Consolidated Net Income for the Year Ended December $31,$ Year $11$

$7.$ What is the Non$-$Controlling Interests $($NCI$)$ share of Net Income for the year ended December $31,$ Year $11$

$8.$ Prepare a Statement of Consolidated Retained Earnings as at December $31,$ Year $11$

$9.$ Prepare a Statement of NCI Balance Sheet as at December $31,$ Year $11$

$10.$ Prepare the Consolidated Income Statement for the period ended December $31,$ Year $11$

$11.$ Prepare the Consolidated Balance Sheet as at December $31,$ Year $11$