Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Pen Lid. acquired an 85% interest in Silk Corp. on December 31, Year 1, for $646,000. On that date, Silk had common shares of $500.000
Pen Lid. acquired an 85% interest in Silk Corp. on December 31, Year 1, for $646,000. On that date, Silk had common shares of $500.000 and retained earnings of $100,000. The imputed acquisition differential allocated $70.000 to inventory, with the balance to patents being amortized over ten years. Silk reported profit of $20,000 in Year 2 and $52,000 in Year 3. While no dividends were declared in Year 2, Silk declared a dividend of $15,000 in Year 3. Pen, which uses the cost method, reported a profit of $28,000 in Year 2 and a loss of $45,000 in Year 3. Pen's retained earnings on December 31, Year 3, were $91,000. Required: Compute the following: (a) Non-controlling interest in profit for Year 2 and Year 3 (Negative amount should be indicated by a minus sign. Omit $ sign in your response.) Nen-controlling interest in profit Year 2 5 Year 3 (b) Consclidated profit attributable to Pen's shareholders for Year 2 and Year 3 (Negative amount should be indicated by a minus sign. Omit $ sign in your response.) Consolidated profit (loss) attributable to Pen's shareholders Year 2 5 Year 3 () Consolidated retained earnings at December 31, Year 3 (Omit $ sign in your response.) Consclidated retained earnings S ] (d) Non-controlling interest at December 31, Year 3 (Omit $ sign in your response.) Non-controlling interest s ] (e) Investment in Silk at December 31, Year 3, if Pen had used the equity method (Omit $ sign in your response.) Investment account equity method $ : (f) Consolidated patents at December 31, Year 3 (Omit $ sign in your response.) Consolidated patents % (a) Non-contrelling interest in profit for Year 2 and Year 3 (Negative amount should be indicated by a minus sign. Omit $ sign in your response.) Men-contrelling interest i Year 2 s[5 (2] Year 3 {b) Consclidated profit attributable to Pen's shareholders for Year 2 and Year 3 (Negative amount should be indicated by a minus sign. Omit $ sign in your response.) Consolidated profit (loss) attributable to Pen's shareholders : [E] B (c) Consolidated retained earnings at December 31, Year 3 (Omit $ sign in your response.) Consclidated retained earnings $|73150 | Q (d) Non-controlling interest at December 31, Year 3 (Omit $ sign in your response.) Non-controlling interest $ 110850 | & (e) Investment in Silk at December 31, Year 3, if Pen had used the equity method (Omit $ sign in your response.) Investment account equity method $1628150| @ (f) Consolidated patents at December 31, Year 3 (Omit $ sign in your response.) Consolidated patents $ 72000 @
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started