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please help asap, I cannot figure out this question. On January 1, Year 7, the Vine Company purchased 60,000 of the 80,000 ordinary shares of
please help asap, I cannot figure out this question.
On January 1, Year 7, the Vine Company purchased 60,000 of the 80,000 ordinary shares of the Devine Company for $80 per share On that date, Devine had ordinary shares of $3,420,000, and retained earnings of $2,180,000. When acquired Devine had inventories with fair values $30,000 less than carrying amount, a parcel of land with a fair value $280,000 greater than the carrying amount, and equipment with a fair value $270,000 less than carrying amount. There were also internally generated patents with an estimated market value of $480,000 and a five-year remaining life. A long-term liability had a market value $180,000 greater than carrying amount this liability was paid off December 31, Year 10. All other identifiable assets and liabilities of Devine had fair values equal to their carrying amounts. Devine's accumulated depreciation on the plant and equipment was $580,000 at the date of acquisition The year 11 financial statements for Vine and Devine were as follows: INCOME STATEMENTS For year ending December 31, Year 11 (in thousands of dollars) Sales Dividends, investment income and gains Total income Cost of goods sold Other expenses Income taxes Total expenses Profit Vine $ 13,200 2.000 15,200 10,400 500 200 (11,100 $4,100 Devine $ 4,600 21.600 7.200 3,100 SOD 200 (3,800 $ 3,400 Devine $ 2,500 13,400 (3,400) STATEMENTS OF FINANCIAL POSITION December 31, Year 11 (in thousands of dollars) Vine Land $ 6,000 Plant and equipment 20,400 Accumulated depreciation (4,200) Investment in Devine, cost 5,080 Inventories 6,200 Cash and current receivables 2,580 Total assets $36,060 Ordinary shares $10,000 Retained earnings 10,400 Long-term liabilities 7,800 Deferred income taxes 1,800 Current liabilities 6,060 Total equity and liabilities $36,060 4,000 1,900 $18,400 $ 3,420 5,600 2,300 100 6,980 $18,400 Additional Information . At the acquisition date, the equipment had an expected remaining useful life of ten years. Both companies use the straight-line method for all depreciation and amortization calculations and the FIFO inventory cost flow assumption. Assume a 40% income tax rate on all applicable items and that there were no impairment losses for goodwill. . On September 1, Year 11, Devine sold a parcel of land to Vine and recorded a total non-operating gain of $480,000. Sales of finished goods from Vine to Devine totalled $1,080,000 in Year 10 and $2,080,000 in Year 11. These sales were priced to provide a gross profit margin on selling price of 33 42% to the Vine Company Devine's December 31, Year 10, inventory contained $324,000 of these sales, December 31, Year 11. Inventory contained $624,000 of these sales, Sales of finished goods from Devine to Vine were $880,000 in Year 10 and $1.280,000 in Year 11. These sales were priced to provide a gross profit margin on selling price of 40% to the Devine Company. Vine's December 31, Year 10. inventory contained $180,000 of these sales, the December 31, Year 11, inventory contained $580,000 of these sales. Vine's Investment in Devine's account is carried in accordance with the cost method and includes advances to Devine of $280,000, which are also included in current liabilities. . There are no intercompany amounts other than those noted, except for the dividends of $500.000 (total amount) declared and paid by Devine Required: (a) The allocation of the acquisition cost at acquisition and the related changes to acquisition differential schedule. (Leave no cells blank - be certain to enter "o" wherever required. Enter your answers in dollars, not in thousands of dollars. Input all values as positive numbers. Do not round gross profit percentage for intermediate computations. Omit S sign in your response.) Acquisition cost Allocation Acquisition January 1, Year 2 Cost Implied value of 100% investment Current Assets:Ordinary Shares Retained Earnings Acquisition differential Life 1 Allocation: Inventory Land Equipment Patents Long-term Liability Subtotal Balance: Goodwill 10 5 9999999 De Changes to Acquisition Differential Table: Allocation Life Changes YR 7 - YR 10 Dr Balance Dec, 3, YR 11 YR 11 1 Inventory Land Equipment Patents Long - term liability Goodwill Dr Cr Cr Or Cr Dr SESESS 10 S 4 Or Cr Dr Dr CE Dr Dr Cr Dr Or Consolidated (b) Prepare the consolidated financial statements using the worksheet approach. (Values in the first two columns and lost column of the Balance Sheet (the parent", "subsidiary" and "consolidated" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Entry columns and income Statement entry columns should be entered es positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Leave no cells blank.be certain to enter "o" wherever required. Enter your answers in dollars. Round your answer to nearest whole dollars. Omit $ sign in your response.) Consolidated Financial statement Morking Paper Vine Company Consolidated Financial Statement December 1 Year 11 in thousands of dollars Entries Vine Devine Income Statements Year 11 Sales Dividend, Investeent Incoon and Gains Total income Cost of goods sold Other expenses Income taxes Tetat expens Profit Attributable to: Shareholders of Peter Non-controlling interest Total Year 11 retained earnings statements tinca Jory 1 Profit DELL I redar Puter Mon controlling interest TRAPA 1 1 Yeard per 141 Balance, January it 1 1 1 5 1 Dividende Naluce eceber Statements of Financial Position December 31, Year 11 Land plant and en Acculte depreciati Patents Gill Investment in bevin Cost Deferred to Inventortes Cassandra Total Oncinary shares Retained Nar-control the Long Tere Tahili Diferentes Current abilities Tatal Shareholdersity Union w Step by Step Solution
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