PLEASE ANSWER ALL THE PARTS ASAPPP !!

Question 2 (80 points) LANCASTER PLC purchased 75% of the voting shares of YORK Inc for 750,000 on January 2, 2018. On that date, YORK PLC's Common Shares and Retained Earnings were valued at 540,000 and 270,000 respectively. LANCASTER uses the cost method to account for its investment in YORK PLC YORK's fair values approximated its carrying values with the following exception: YORK's bonds payable had a fair value which was 75,000 higher than their carrying value. The bonds payable mature on December 31, 2027. Both companies use straight line amortization exclusively. The Financial Statements of both companies for the Year ended December 31, 2020 are shown below: Income Statement LANCASTER, PLC 1,350,000 270,000 YORK Inc. 1,080,000 162,000 Sales Other Revenues Less: Expenses Cost of Goods Sold Depreciation Expense Other Expenses Income Tax Expense Net Income 1,080,000 54,000 162,000 129,600 194,400 864,000 27,000 81,000 108,000 162,000 Retained Earnings Statements Balance, July 1, 2019 LANCASTER, PLC 540,000 YORK Inc. 648,000 C10nma Nada C10440 Retained Earnings Statements Balance, July 1, 2019 Net Income Less: Dividends Retained Earnings, June 30, 2020 LANCASTER, PLC 540,000 194,400 -59,400 $675,000 YORK Inc. 648,000 162,000 -81,000 $729,000 Balance Sheets LANCASTER, PLC 405,000 945,000 540,000 750,000 108,000 972,000 $3,720,000 YORK Inc. 324,000 432,000 486,000 Cash Accounts Receivable Inventory Investment in YORK Inc. Land Equipment (net) Total Assets 648,000 $1,890,000 Current Liabilities Bonds Payable Common Shares Retained Earnings Total Liabilities and Equity 1,020,000 675,000 1,350,000 675,000 3,720,000 351,000 270,000 540,000 729,000 1,890,000 Other Information: At the end of 2020, LANCASTER assessed that the goodwill of YORK was impaired by 26,500 due to declining profitability. During 2019: LLIVUUU Dunur ayavic Common Shares Retained Earnings Total Liabilities and Equity Other Information: 1,350,000 675,000 3,720,000 540,000 729,000 1,890,000 At the end of 2020, LANCASTER assessed that the goodwill of YORK was impaired by 26,500 due to declining profitability. During 2019: . LANCASTER sold 135,000 worth of Inventory to YORK, 80% of which was sold to outsiders by year end. YORK sold 180,000 worth of inventory to LANCASTER, 60% of which was sold to outsiders by year end. During 2020: LANCASTER sold inventory to YORK for 90,000 two-thirds of which was resold by YORK to outside parties by year end. YORK sold inventory to LANCASTER for 225,000. 80% of this inventory was resold by LANCASTER to outside parties by year end. On May 5, 2020, YORK sold a plot of Land to LANCASTER for 108,000. The land was recorded at cost of 63,000 on YORK's books prior to the sale. LANCASTER has not yet sold the land. All intercompany sales as well as sales to outsiders are priced to generate a 33 1/3% gross profit. The effective tax rate for both companies is 20%. LANCASTER records dividend revenue in Other Revenues. Both companies record interest expense in Other Expenses. Goodwill impairments are separately presented. e was resola by LANCASTER to outside parties by year ena. On May 5, 2020, YORK sold a plot of Land to LANCASTER for 108,000. The land was recorded at cost of 63,000 on YORK's books prior to the sale. LANCASTER has not yet sold the land. All intercompany sales as well as sales to outsiders are priced to generate a 33 1/3% gross profit. The effective tax rate for both companies is 20%. LANCASTER records dividend revenue in Other Revenues. Both companies record interest expense in Other Expenses. Goodwill impairments are separately presented. REQUIRED 1. Calculated LANCASTER's Consolidated Balance Sheet Goodwill at the date of acquisition. 2. Calculate realized and unrealized profits for the fiscal year ended December 31, 2020 for both companies. Show your figures before and after tax. 3. Prepare LANCASTER's Consolidated Income Statement for the Year ended December 31, 2020, including the attribution of consolidated net income between the controlling and non-controlling interests. 4. Calculate the non-controlling interest (Balance Sheet) as at December 31, 2020. 5. Calculate Consolidated Retained Earnings as at December 31, 2020. Question 2 (80 points) LANCASTER PLC purchased 75% of the voting shares of YORK Inc for 750,000 on January 2, 2018. On that date, YORK PLC's Common Shares and Retained Earnings were valued at 540,000 and 270,000 respectively. LANCASTER uses the cost method to account for its investment in YORK PLC YORK's fair values approximated its carrying values with the following exception: YORK's bonds payable had a fair value which was 75,000 higher than their carrying value. The bonds payable mature on December 31, 2027. Both companies use straight line amortization exclusively. The Financial Statements of both companies for the Year ended December 31, 2020 are shown below: Income Statement LANCASTER, PLC 1,350,000 270,000 YORK Inc. 1,080,000 162,000 Sales Other Revenues Less: Expenses Cost of Goods Sold Depreciation Expense Other Expenses Income Tax Expense Net Income 1,080,000 54,000 162,000 129,600 194,400 864,000 27,000 81,000 108,000 162,000 Retained Earnings Statements Balance, July 1, 2019 LANCASTER, PLC 540,000 YORK Inc. 648,000 C10nma Nada C10440 Retained Earnings Statements Balance, July 1, 2019 Net Income Less: Dividends Retained Earnings, June 30, 2020 LANCASTER, PLC 540,000 194,400 -59,400 $675,000 YORK Inc. 648,000 162,000 -81,000 $729,000 Balance Sheets LANCASTER, PLC 405,000 945,000 540,000 750,000 108,000 972,000 $3,720,000 YORK Inc. 324,000 432,000 486,000 Cash Accounts Receivable Inventory Investment in YORK Inc. Land Equipment (net) Total Assets 648,000 $1,890,000 Current Liabilities Bonds Payable Common Shares Retained Earnings Total Liabilities and Equity 1,020,000 675,000 1,350,000 675,000 3,720,000 351,000 270,000 540,000 729,000 1,890,000 Other Information: At the end of 2020, LANCASTER assessed that the goodwill of YORK was impaired by 26,500 due to declining profitability. During 2019: LLIVUUU Dunur ayavic Common Shares Retained Earnings Total Liabilities and Equity Other Information: 1,350,000 675,000 3,720,000 540,000 729,000 1,890,000 At the end of 2020, LANCASTER assessed that the goodwill of YORK was impaired by 26,500 due to declining profitability. During 2019: . LANCASTER sold 135,000 worth of Inventory to YORK, 80% of which was sold to outsiders by year end. YORK sold 180,000 worth of inventory to LANCASTER, 60% of which was sold to outsiders by year end. During 2020: LANCASTER sold inventory to YORK for 90,000 two-thirds of which was resold by YORK to outside parties by year end. YORK sold inventory to LANCASTER for 225,000. 80% of this inventory was resold by LANCASTER to outside parties by year end. On May 5, 2020, YORK sold a plot of Land to LANCASTER for 108,000. The land was recorded at cost of 63,000 on YORK's books prior to the sale. LANCASTER has not yet sold the land. All intercompany sales as well as sales to outsiders are priced to generate a 33 1/3% gross profit. The effective tax rate for both companies is 20%. LANCASTER records dividend revenue in Other Revenues. Both companies record interest expense in Other Expenses. Goodwill impairments are separately presented. e was resola by LANCASTER to outside parties by year ena. On May 5, 2020, YORK sold a plot of Land to LANCASTER for 108,000. The land was recorded at cost of 63,000 on YORK's books prior to the sale. LANCASTER has not yet sold the land. All intercompany sales as well as sales to outsiders are priced to generate a 33 1/3% gross profit. The effective tax rate for both companies is 20%. LANCASTER records dividend revenue in Other Revenues. Both companies record interest expense in Other Expenses. Goodwill impairments are separately presented. REQUIRED 1. Calculated LANCASTER's Consolidated Balance Sheet Goodwill at the date of acquisition. 2. Calculate realized and unrealized profits for the fiscal year ended December 31, 2020 for both companies. Show your figures before and after tax. 3. Prepare LANCASTER's Consolidated Income Statement for the Year ended December 31, 2020, including the attribution of consolidated net income between the controlling and non-controlling interests. 4. Calculate the non-controlling interest (Balance Sheet) as at December 31, 2020. 5. Calculate Consolidated Retained Earnings as at December 31, 2020