OSullivan Corp. purchased $75\%$ of the outstanding shares of Rabb Ltd$.$ on January $1,$ Year $3,$ at a cost of $$148,600.$ Non$-$controlling interest was valued at $$55,000$ by an independent business valuator at the date of acquisition. On that date, Rabb had common shares of $$60,000$ and retained earnings of $$40,000.$ Fair values were equal to carrying amounts for all the net assets except the following:

Carrying Amount Fair Value

Inventory $ $40,000$ $ $24,000$

Equipment $47,00074,000$

Software $20,000$

The equipment had an estimated remaining useful life of six years on January $1,$ Year $3,$ and the software was to be amortized over ten years. Foxx uses the cost method to account for its investment. The testing for impairment at December $31,$ Year $6,$ yielded the following fair values:

Software $ $10,000$

Goodwill $71,031$

The impairment loss on these assets occurred entirely in Year $6.$ Amortization expense is grouped with administrative expenses, and impairment losses are grouped with miscellaneous expenses. The parents share of the goodwill noted above is $$49,262.$

The following are the financial statements of OSullivan Corp. and its subsidiary Rabb Ltd$.$ for Year $6$:

BALANCE SHEETS

At December $31,$ Year $6$

OSullivan Corp. Rabb Ltd$.$

Cash $ $ $11,000$

Accounts receivable $50,00040,000$

Note receivable $50,000$

Inventory $76,00054,000$

Equipment, net $270,00086,000$

Land $200,00040,000$

Investment in Rabb $148,600$

$ $744,600$ $ $281,000$

Bank indebtedness $ $140,000$ $

Accounts payable $80,00070,000$

Notes payable $50,000$

Common shares $160,00060,000$

Retained earnings $314,600151,000$

$ $744,600$ $ $281,000$

STATEMENTS OF RETAINED EARNINGS

Year ended December $31,$ Year $6$

OSullivan Corp. Rabb Ltd$.$

Retained earnings, January $1,$ Year $6$ $ $203,000$ $ $142,000$

Net income $145,25048,000$

Dividends $(33,650)(39,000)$

Retained earnings, December $31,$ Year $6$ $ $314,600$ $ $151,000$

INCOME STATEMENTS

For the year ended December $31,$ Year $6$

OSullivan Corp. Rabb Ltd$.$

Sales $ $831,000$ $ $350,000$

Investment income $29,2508,600$

$860,250358,600$

Cost of sales $490,000210,000$

Administrative expenses $45,00017,000$

Miscellaneous expenses $120,00041,600$

Income taxes $60,00042,000$

$715,000310,600$

Net income $ $145,250$ $ $48,000$

Additional Information

The notes payable are intercompany.

Required:

$($a$)$ Prepare the Year $6$ consolidated financial statements. $($Input all values as positive numbers. Leave no cells blank $-$ be certain to enter $"0"$ wherever required. Round your intermediate computations to nearest whole dollar value. Omit $ sign in your response. The balance sheet total may vary due to rounding.$)$

OSullivan Corp.

Statement of Consolidated Retained Earnings

Year ended December $31,$ Year $6$

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$($b$)$ Calculate goodwill impairment loss and non$-$controlling interest on the consolidated income statement for the year ended December $31,$ Year $6,$ under the identifiable net assets method. $($Round intermediate calculations and final answers to whole number. Omit $ sign in your response.$)$

Goodwill impairment loss $

NCI identifiable net assets method

$($c$)$ This part of the question is not part of your Connect assignment.