%: Peak Inc. purchased 80% of the outstanding voting shares of Summit Inc. for $700,000 on July 1, 2019. On that date, Summit Inc. had Common Stock and Retained Earnings worth $210,000 and $70,000, respectively. The Equipment had a remaining useful life of 10 years from the date of acquisition Summit's Bonds Payable mature on July 1, 2039. The inventory was sold in the year following the acquisition. Both companies use straight line amortization, and no salvage value is assumed for assets. Peak Inc. and Summit Inc, declared and paid $10,000 and $5,000 in dividends, respectively during the year. (9 marks) The Balance Sheets of both companies, as well as Summit's Fair Market Values on July 1, 2019 are: Balance Sheets: Peak Inc. Summit Inc. Fair Value Cash $535,000 $230,000 $230,000 Accounts Receivable 140,000 85,000 85,000 Inventory 60,000 45,000 75,000 Investment in Summit Inc. 700,000 Equipment (net) 50,000 80,000 90,000 Land 115,000 200,000 200,000 Total Assets $1,600,000 S640,000 Current Liabilities $ 100,000 $300,000 300,000 Bonds Payable 160,000 60,000 80,000 Common Shares 800,000 210,000 Retained Earnings 540,000 70,000 Total Liabilities & Equity $1,600,000 S640,000 The following are the Income Statement and RE Statement for both companies for the fiscal year ended June 30, 2021: Income Statements: Peak Inc. Summit Inc. Sales $800,000 $300,000 Investment Revenue 16,000 Less: Expenses: Cost of Goods Sold: 240,000 180,000 Amortization 10,000 20,000 Interest Expense 12,000 40,000 Other Expenses 8,000 10,000 Net Income $546,000 S 50,000 Retained Earnings Statements: Balance, July 1, 2019 $ 536,800 $ 70,000 Net Income 546,000 50,000 Less: Dividends 10,000) ($ 5,000) Balance, June 30, 2020 $1,072,800 S115,000 9. cont'd The following is the Balance Sheet for both companies for the fiscal year ended June 30, 2021: Balance Sheets: Peak Inc. Summit Inc. Cash Accounts Receivable $ 680,000 $ 465,000 Investment in Summit 250,000 35,000 Inventory 712,000 90,000 45,000 Equipment (net) 750,000 70,000 Land 115.000 Total Assets S2,482,000 S730,000 Current Liabilities $ 449,200 $325,000 Bonds Payable 160,000 80,000 Common Shares 800,000 210,000 Retained Earnings 1,072.800 115,000 Total Liabilities & Equity $2.482,000 $730,000 Both companies use a FIFO system, and all of Summit's inventory on the date of acquisition was sold during the following year. The Goodwill on acquisition was impaired by $35,000 in the 2020 fiscal year. During 2019, Summit Inc borrowed $10,000 in Cash from Peak Inc. interest free to finance its operations. Peak uses the equity method to account for its Investment in Summit Inc.. Required: a) Prepare Peak's Consolidated Income Statement for the Year ended June 30, 2021. (5 marks) 9. cont'd b) Prepare Peak's Consolidated Retained Earnings Statement as at June 30, 2021. (1 mark) c) Calculate $ value for just the Non-Controlling Interest Account (on the Balance Sheet as at June 30, 2021. (4 marks) %: Peak Inc. purchased 80% of the outstanding voting shares of Summit Inc. for $700,000 on July 1, 2019. On that date, Summit Inc. had Common Stock and Retained Earnings worth $210,000 and $70,000, respectively. The Equipment had a remaining useful life of 10 years from the date of acquisition Summit's Bonds Payable mature on July 1, 2039. The inventory was sold in the year following the acquisition. Both companies use straight line amortization, and no salvage value is assumed for assets. Peak Inc. and Summit Inc, declared and paid $10,000 and $5,000 in dividends, respectively during the year. (9 marks) The Balance Sheets of both companies, as well as Summit's Fair Market Values on July 1, 2019 are: Balance Sheets: Peak Inc. Summit Inc. Fair Value Cash $535,000 $230,000 $230,000 Accounts Receivable 140,000 85,000 85,000 Inventory 60,000 45,000 75,000 Investment in Summit Inc. 700,000 Equipment (net) 50,000 80,000 90,000 Land 115,000 200,000 200,000 Total Assets $1,600,000 S640,000 Current Liabilities $ 100,000 $300,000 300,000 Bonds Payable 160,000 60,000 80,000 Common Shares 800,000 210,000 Retained Earnings 540,000 70,000 Total Liabilities & Equity $1,600,000 S640,000 The following are the Income Statement and RE Statement for both companies for the fiscal year ended June 30, 2021: Income Statements: Peak Inc. Summit Inc. Sales $800,000 $300,000 Investment Revenue 16,000 Less: Expenses: Cost of Goods Sold: 240,000 180,000 Amortization 10,000 20,000 Interest Expense 12,000 40,000 Other Expenses 8,000 10,000 Net Income $546,000 S 50,000 Retained Earnings Statements: Balance, July 1, 2019 $ 536,800 $ 70,000 Net Income 546,000 50,000 Less: Dividends 10,000) ($ 5,000) Balance, June 30, 2020 $1,072,800 S115,000 9. cont'd The following is the Balance Sheet for both companies for the fiscal year ended June 30, 2021: Balance Sheets: Peak Inc. Summit Inc. Cash Accounts Receivable $ 680,000 $ 465,000 Investment in Summit 250,000 35,000 Inventory 712,000 90,000 45,000 Equipment (net) 750,000 70,000 Land 115.000 Total Assets S2,482,000 S730,000 Current Liabilities $ 449,200 $325,000 Bonds Payable 160,000 80,000 Common Shares 800,000 210,000 Retained Earnings 1,072.800 115,000 Total Liabilities & Equity $2.482,000 $730,000 Both companies use a FIFO system, and all of Summit's inventory on the date of acquisition was sold during the following year. The Goodwill on acquisition was impaired by $35,000 in the 2020 fiscal year. During 2019, Summit Inc borrowed $10,000 in Cash from Peak Inc. interest free to finance its operations. Peak uses the equity method to account for its Investment in Summit Inc.. Required: a) Prepare Peak's Consolidated Income Statement for the Year ended June 30, 2021. (5 marks) 9. cont'd b) Prepare Peak's Consolidated Retained Earnings Statement as at June 30, 2021. (1 mark) c) Calculate $ value for just the Non-Controlling Interest Account (on the Balance Sheet as at June 30, 2021. (4 marks)