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Please help me solve the question in the file. Thank you a lot ! On January 1, 2014, Poplar Incorporated purchased 66,500 of the 95,000

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Please help me solve the question in the file. Thank you a lot !

image text in transcribed On January 1, 2014, Poplar Incorporated purchased 66,500 of the 95,000 outstanding common shares of Sycamore Limited (a 70% interest) for a cash payment of $700,000. On that date, Sycamore had share capital of $800,000 and retained earnings of $112,000. Any acquisition differential was classified as goodwill. During 2014, Sycamore Limited reported net income of $120,000 earned evenly over the year and paid dividends of $40,000 on April 1 and an additional $50,000 on October 1. On July 1, 2014, Poplar purchased an additional 5,000 common shares directly from Sycamore Limited (increasing the number of shares outstanding to 100,000). The cost of the additional shares was $50,000. Poplar accounts for its investment in Sycamore using the cost method and valued the noncontrolling interest in Sycamore on the acquisition date based on its fair value, proportionate to the amount paid for its controlling interest. Following are the condensed balance sheets of the two companies at December 31, 2014: Required: Prepare a consolidated balance sheet for Poplar and its subsidiary as at December 31, 2014. (Hint: The acquisition of the additional shares by Poplar did not change the consolidated cash balances as the money was paid by the parent to the subsidiary.) Poplar Group The consolidated statement of financial position As at 31 December 2014 Non-current assets Goodwill (W2) Other assets (4,250,000+1,200,000) Total assets $ 78,000 5,450,00 0 5,528,00 0 Equity Share capital 2000,000 Group retained earnings (W4) 456,000 Non-controlling interest (W3) 264,000 ------- 2,720,00 0 Current liabilities (2,600,000 + 208,000) 2,808,00 0 ------- 5,528,00 0 Total equity and liabilities Workings (W1) Net assets of sycamore At date of acquisition At reporting date Share capital 800,000 850,000 Retained earnings 112,000. 142,000 ------ 912,000 992,000 ------ Net assets ------ ------ (W2) Goodwill FV of consideration paid 750,000 FV of NCI at acquisition 240,000 ------ 990,000 Less: FV of net assets at acquisition (W1) (912,000) ------ Goodwill on acquisition 78,000 ------ (W3) Non-controlling interests FV of NCI at acquisition (as in W2) 240,000 NCI share of post-acquisition reserves (W1) 24,000 (30% (992,000 - 912,000)) ------ 264,000 ------ (W4) Group retained earnings 100% Poplar's retained earnings 70% Sycamore's post-acquisition retained earnings (70% $(992,000 - 912,000 (W1)) 400,000 56,000 ------ 456,000

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