OSullivan Corp. purchased 75% of the outstanding shares of Rabb Ltd. on January 1, Year 3, at a cost of $117,000. Non-controlling interest was valued at $35,000 by an independent business valuator at the date of acquisition. On that date, Rabb had common shares of $50,000 and retained earnings of $30,000. Fair values were equal to carrying amounts for all the net assets except the following:

	Carrying Amount			Fair Value
Inventory	$	30,000		$	19,000
Equipment		45,000			69,000
Software					15,000

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. OSullivan uses the cost method to account for its investment. The testing for impairment at December 31, Year 6, yielded the following fair values:

Software	$	8,000
Goodwill		20,000

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 $16,364.

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	$			$	10,000
Accounts receivable		40,000			30,000
Note receivable					40,000
Inventory		66,000			44,000
Equipment, net		220,000			76,000
Land		150,000			30,000
Investment in Rabb		117,000
	$	593,000		$	230,000
Bank indebtedness	$	90,000		$
Accounts payable		70,000			60,000
Notes payable		40,000
Common shares		150,000			50,000
Retained earnings		243,000			120,000
	$	593,000		$	230,000

STATEMENTS OF RETAINED EARNINGS
Year ended December 31, Year 6
	OSullivan Corp.				Rabb Ltd.
Retained earnings, January 1, Year 6	$	153,000			$	92,000
Net income		120,000				48,000
Dividends		(30,000	)			(20,000	)
Retained earnings, December 31, Year 6	$	243,000			$	120,000

INCOME STATEMENTS
For the year ended December 31, Year 6
	OSullivan Corp.			Rabb Ltd.
Sales	$	821,000		$	320,000
Investment income		15,000			3,600
		836,000			323,600
Cost of sales		480,000			200,000
Administrative expenses		40,000			12,000
Miscellaneous expenses		116,000			31,600
Income taxes		80,000			32,000
		716,000			275,600
Net income	$	120,000		$	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.)

OSullivan Corp. Statement of Consolidated Retained Earnings Year ended December 31, Year 6
(Click to select) Balance December 31 Balance January 1	$
(Click to select) Net income Net loss
(Click to select) Add: Dividends Less: Dividends
(Click to select) Balance January 1 Balance December 31	$

(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. (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.