Please answer the questions in the book and fill out the charts with explanations

Rossman Corporation holds 75 percent of the common stocks of Schmid Distributors Inc., purchased on December 31, 20x1, for $2,340,000. At the date of acquisition, Schmid reported common stock with a par value of $1,000,000, additional paid-in capital of $1,350,000, and retained earnings of $620,000. The fair value of the non-controlling interest at acquisition was $780,000. The differential at acquisition was attributable to the following items: Inventory (sold in 20x2) Land Goodwill Total Differential $30,000 56,000 64,000 $150,000 During 20x2, Rossman sold a plot of land that it had purchased several years before to Schmid at a gain of $23,000; Schmid continues to hold the land. In 20x6, Rossman and Schmid entered into a five-year contract under which Rossman provides management consulting services to Schmid on a continuing basis; Schmid pays Rossman a fixed fee of $80,000 per year for these services. At December 31, 20x8, Schmid owed Rossman $20,000 as the final 20x8 quarterly payment under the contract. On January 2, 20x8, Rossman paid $250,000 to Schmid to purchase equipment that Schmid was then carrying at $290,000. Schmid had purchased that equipment on December 27, 20x2, for $435,000. The equipment is expected to have a total 15-year life and no salvage value. The amount of the differential assigned to goodwill has not been impaired. At December 31, 20x8, trial balances for Rossman and Schmid appeared as follows: Schmid Distributors Inc. Debit Credit $38,000 89,400 218,900 Cash Current Receivables Inventory Investment in Schmid Stock Land Buildings & Equipment Cost of Goods Sold Depreciation & Amortization Other Expenses Dividends Declared Accumulated Depreciation Current Payables Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings, January 1 Sales Rossman Corporation Debit Credit $50,700 101,800 286,000 2,974,000 400,000 2,400,000 2,193,000 202,000 1,381,000 50,000 $1,105,000 86,200 1,000,000 100,000 1,272,000 1,474,800 4,801,000 1,200,000 2,990,000 525,000 88,000 227,000 20,000 $420,000 76,300 200,000 1,000,000 1,350,000 1,400,000 985,000 (continued) Other Income or Loss Income from Schmid Total 90,000 35,000 109,500 $10,038,500 $10,038,500 $5,431,300 $5431,300 As of December 31, 20x8, Schmid had declared but not yet paid its fourth-quarter dividend of $5,000. Both companies use straight-line depreciation and amortization. Rossman uses the fully adjusted equity method to account for its investment in Schmid. Differential Life 20X1 20X220X3 20X4 20X5 20X6 20X720X8 Cost Sale price Gain/Loss Is this an UPSTREAM or DOWNSTREAM transaction? Was there a gain or loss on the intercompany asset transfer? If so, what was the amount of gain or loss? Cost Accumulated Depreciation Book Value Sale Price Gain/Loss Is this an UPSTREAM OR DOWNSTREAM transaction? What is the balance of Equipment on 1/2/20X8 after the intercompany asset transfer? What should the balance of Equipment be on 1/2/20X8? What is the balance of Accum, Dep. on 1/2/20X8 after the intercompany asset transfer? What should the balance of Accumulated Depreciation be on 1/2/20X8? What is the book value of the equipment on 1/2/20X8, before the intercompany transfer? What was the original useful life of the equipment? What is the remaining useful life of the equipment on the date of the intercompany asset transfer? What is the amount of the gain or loss on the transaction as of the date of the intercompany transfer? What was the amount of annual depreciation expense taken before the intercompany asset transfer? What is the amount of annual depreciation expense taken after the intercompany asset transfer? Rossman Corp. Schmid Dist. Elimination Entries DR CR Consolidated 4,801,000 90,000 (2,193,000) 985,000 (35,000) (525,000 Income Statement Sales Other Income or Loss Less: COGS Less: Depreciation & Amort. Expense Less: Other Expenses Income from Schmid Dist. Consolidated Net Income NCI in Net Income Controlling Interest in NI (202,000) (1,381,000) 109,500 (88,000) (227,000) 1,224,500 110,000 1,224,500 110,000 Statement of Retained Earnings Beginning Balance 1,474,800 Net Income 1,224,500 Less: Dividends Declared (50,000) Ending Balance 2,649,300 1,400,000 110,000 (20,000) 1,490,000 Balance Sheet Cash Current Receivables Inventory Land Buildings & Equipment Less: Accumulated Depr. Investment in Schmid Differential Goodwill Total Assets 50,700 101,800 286,000 400,000 2,400,000 (1,105,000) 2,974,000 38,000 89,400 218,900 1,200,000 2,990,000 (420,000) 5,107,500 4,116,300 Current Payables Bonds Payable Common Stock Additional Paid-in Capital Retained Earnings NCI in NA of Schmid Dist. Total Liabilities & Equity 86,200 1,000,000 100,000 1,272,000 2,649,300 76,300 200,000 1,000,000 1,350,000 1,490,000 5,107,500 4,116,300 Rossman Corporation holds 75 percent of the common stocks of Schmid Distributors Inc., purchased on December 31, 20x1, for $2,340,000. At the date of acquisition, Schmid reported common stock with a par value of $1,000,000, additional paid-in capital of $1,350,000, and retained earnings of $620,000. The fair value of the non-controlling interest at acquisition was $780,000. The differential at acquisition was attributable to the following items: Inventory (sold in 20x2) Land Goodwill Total Differential $30,000 56,000 64,000 $150,000 During 20x2, Rossman sold a plot of land that it had purchased several years before to Schmid at a gain of $23,000; Schmid continues to hold the land. In 20x6, Rossman and Schmid entered into a five-year contract under which Rossman provides management consulting services to Schmid on a continuing basis; Schmid pays Rossman a fixed fee of $80,000 per year for these services. At December 31, 20x8, Schmid owed Rossman $20,000 as the final 20x8 quarterly payment under the contract. On January 2, 20x8, Rossman paid $250,000 to Schmid to purchase equipment that Schmid was then carrying at $290,000. Schmid had purchased that equipment on December 27, 20x2, for $435,000. The equipment is expected to have a total 15-year life and no salvage value. The amount of the differential assigned to goodwill has not been impaired. At December 31, 20x8, trial balances for Rossman and Schmid appeared as follows: Schmid Distributors Inc. Debit Credit $38,000 89,400 218,900 Cash Current Receivables Inventory Investment in Schmid Stock Land Buildings & Equipment Cost of Goods Sold Depreciation & Amortization Other Expenses Dividends Declared Accumulated Depreciation Current Payables Bonds Payable Common Stock Additional Paid-In Capital Retained Earnings, January 1 Sales Rossman Corporation Debit Credit $50,700 101,800 286,000 2,974,000 400,000 2,400,000 2,193,000 202,000 1,381,000 50,000 $1,105,000 86,200 1,000,000 100,000 1,272,000 1,474,800 4,801,000 1,200,000 2,990,000 525,000 88,000 227,000 20,000 $420,000 76,300 200,000 1,000,000 1,350,000 1,400,000 985,000 (continued) Other Income or Loss Income from Schmid Total 90,000 35,000 109,500 $10,038,500 $10,038,500 $5,431,300 $5431,300 As of December 31, 20x8, Schmid had declared but not yet paid its fourth-quarter dividend of $5,000. Both companies use straight-line depreciation and amortization. Rossman uses the fully adjusted equity method to account for its investment in Schmid. Differential Life 20X1 20X220X3 20X4 20X5 20X6 20X720X8 Cost Sale price Gain/Loss Is this an UPSTREAM or DOWNSTREAM transaction? Was there a gain or loss on the intercompany asset transfer? If so, what was the amount of gain or loss? Cost Accumulated Depreciation Book Value Sale Price Gain/Loss Is this an UPSTREAM OR DOWNSTREAM transaction? What is the balance of Equipment on 1/2/20X8 after the intercompany asset transfer? What should the balance of Equipment be on 1/2/20X8? What is the balance of Accum, Dep. on 1/2/20X8 after the intercompany asset transfer? What should the balance of Accumulated Depreciation be on 1/2/20X8? What is the book value of the equipment on 1/2/20X8, before the intercompany transfer? What was the original useful life of the equipment? What is the remaining useful life of the equipment on the date of the intercompany asset transfer? What is the amount of the gain or loss on the transaction as of the date of the intercompany transfer? What was the amount of annual depreciation expense taken before the intercompany asset transfer? What is the amount of annual depreciation expense taken after the intercompany asset transfer? Rossman Corp. Schmid Dist. Elimination Entries DR CR Consolidated 4,801,000 90,000 (2,193,000) 985,000 (35,000) (525,000 Income Statement Sales Other Income or Loss Less: COGS Less: Depreciation & Amort. Expense Less: Other Expenses Income from Schmid Dist. Consolidated Net Income NCI in Net Income Controlling Interest in NI (202,000) (1,381,000) 109,500 (88,000) (227,000) 1,224,500 110,000 1,224,500 110,000 Statement of Retained Earnings Beginning Balance 1,474,800 Net Income 1,224,500 Less: Dividends Declared (50,000) Ending Balance 2,649,300 1,400,000 110,000 (20,000) 1,490,000 Balance Sheet Cash Current Receivables Inventory Land Buildings & Equipment Less: Accumulated Depr. Investment in Schmid Differential Goodwill Total Assets 50,700 101,800 286,000 400,000 2,400,000 (1,105,000) 2,974,000 38,000 89,400 218,900 1,200,000 2,990,000 (420,000) 5,107,500 4,116,300 Current Payables Bonds Payable Common Stock Additional Paid-in Capital Retained Earnings NCI in NA of Schmid Dist. Total Liabilities & Equity 86,200 1,000,000 100,000 1,272,000 2,649,300 76,300 200,000 1,000,000 1,350,000 1,490,000 5,107,500 4,116,300