Patch Corporation acquired a 90% interest in Sarg Corporation's outstanding voting common stack on January 1, 2001. for $610.000 cash The stockholders' equity of Sarg on this date consisted of $500.000 capital stock and $200,000 retained earnings. The separate financial statements of Parch and Surg Corporations at and for the year ended December 31, 2003. summarized as follow's (in the sands) Parch Combined Income and Retained Earnings Statement for the war ended December 31, 2003 Sales S500 Income from Sarg Gain on land 10 (300) (300) (35) (200) Gain on equipment Cost of sales Depreciation expenses Other expenses Net income Beginning retained earnings Dividends Retained eaming December 31, 2003 (65) 110 200 (50) 5260 (100) 5700 Balance Sheetar December 31, 2003 Cash Accounts receives -net Inventories Other current items Land Buildingset Equipment-net Investment in Sarg 200 150 51.700 Accounts payable Other liabilities Capital stock, SIO par Reted earnings 200 260 S1,700 SERO During 2003, Parchmade sales of $50,000 to Sarg at gross profit of $15,000. One third of these sales were inventories by Sarg at year end. Sargwed Parch S100,000 o pen account at December 31, 2003 Sang sold land that cost $20,000 for Parch for $30,000 on July 1, 2003, Purch still owns the land. On January 1, 2003. Parch sold equipment with a book value of $20,000 anda remaining useful life of four years to Sarg for $40,000. Sarg uses straight-line depreciation and assumes no residual value on this equipment Required Prepare consolidation working papers for Parch Corporation and Subsidiary for the year ended December 31, 2003 E 4-4 Excess assigned to identifiable net assets Palat Ltd. paid $3,600,000 cash to acquire 90 percent of Sanun Ltd.'s voting stock on January 1, 2014. Sanun's total stockholders' equity at the time was $5,000,000. The differences between the book values and fair values of Sanun's assets and liabilities at January 1, 2014 are presented below: Inventory (sold in the current year) was overvalued by $200,000 Land was overvalued by $500.000. Equipment (remaining life of 4 years) was undervalued by $400,000. Building (remaining life of 5 years) was overvalued by $750,000. Notes receivable (due in 4 years) was undervalued by $200,000. Sanun Ltd. declared dividends of $150,000 each in March and June 2014. Its net income for the year was $1,000,000 REQUIRED 1. Calculate the goodwill that should be reported in the consolidated balance sheet. 2. Calculate income from Sanun Ltd. for 2014. 3. Calculate the balance of the Investment in Sanun Ltd. account at December 31, 2014 4. Calculate noncontrolling interest balance at December 31, 2014. Patch Corporation acquired a 90% interest in Sarg Corporation's outstanding voting common stack on January 1, 2001. for $610.000 cash The stockholders' equity of Sarg on this date consisted of $500.000 capital stock and $200,000 retained earnings. The separate financial statements of Parch and Surg Corporations at and for the year ended December 31, 2003. summarized as follow's (in the sands) Parch Combined Income and Retained Earnings Statement for the war ended December 31, 2003 Sales S500 Income from Sarg Gain on land 10 (300) (300) (35) (200) Gain on equipment Cost of sales Depreciation expenses Other expenses Net income Beginning retained earnings Dividends Retained eaming December 31, 2003 (65) 110 200 (50) 5260 (100) 5700 Balance Sheetar December 31, 2003 Cash Accounts receives -net Inventories Other current items Land Buildingset Equipment-net Investment in Sarg 200 150 51.700 Accounts payable Other liabilities Capital stock, SIO par Reted earnings 200 260 S1,700 SERO During 2003, Parchmade sales of $50,000 to Sarg at gross profit of $15,000. One third of these sales were inventories by Sarg at year end. Sargwed Parch S100,000 o pen account at December 31, 2003 Sang sold land that cost $20,000 for Parch for $30,000 on July 1, 2003, Purch still owns the land. On January 1, 2003. Parch sold equipment with a book value of $20,000 anda remaining useful life of four years to Sarg for $40,000. Sarg uses straight-line depreciation and assumes no residual value on this equipment Required Prepare consolidation working papers for Parch Corporation and Subsidiary for the year ended December 31, 2003 E 4-4 Excess assigned to identifiable net assets Palat Ltd. paid $3,600,000 cash to acquire 90 percent of Sanun Ltd.'s voting stock on January 1, 2014. Sanun's total stockholders' equity at the time was $5,000,000. The differences between the book values and fair values of Sanun's assets and liabilities at January 1, 2014 are presented below: Inventory (sold in the current year) was overvalued by $200,000 Land was overvalued by $500.000. Equipment (remaining life of 4 years) was undervalued by $400,000. Building (remaining life of 5 years) was overvalued by $750,000. Notes receivable (due in 4 years) was undervalued by $200,000. Sanun Ltd. declared dividends of $150,000 each in March and June 2014. Its net income for the year was $1,000,000 REQUIRED 1. Calculate the goodwill that should be reported in the consolidated balance sheet. 2. Calculate income from Sanun Ltd. for 2014. 3. Calculate the balance of the Investment in Sanun Ltd. account at December 31, 2014 4. Calculate noncontrolling interest balance at December 31, 2014