Please help me to understand the solve the problem in the attachment.

ACCT4211 Chapters 4 and 5 Homework (Spring 2016) FULL Name: ___________________________ P 4-32 Assume that Primary issued $520,000 bonds and used the proceeds to purchase 80% of Street Company's outstanding voting common stock on January 2, 208. At that date the fair value of the noncontrolling interest was $130,000. Primary uses the equity method to account for its investment in Street for internal reporting purposes. Fair value of Stree's assets and liabilities is available in the textbook. Additional information for Street as of January 2, 208: (1) Buildings and equipment have 10 years of remaining useful life and are to be depreciated using the straight-line method with no residual value. (2) Patents have 5 years of remaining useful life and are to be amortized using the straight-line method with no residual value. (4) Bonds payable is due in 5 years. Premiums or discounts are amortized using the straight-line method. Note that the fair values for Receivables and Buildings & Equipment are for receivable, net of allowance for bad debts and Buildings & Equipment, net of accumulated depreciation. 209 financial statements (in thousands) for Primary and Street are as follows, respectively. Primary Street Income Statement (209) Sales 390 235 Cost of goods sold (280) (114) Depreciation expense (55) (45) Interest expense (36) (6) Investment income ? Net Income ? 70 Statement of R/E Balance, 1/1/9 136 168 Net income ? 70 Dividends paid (20) (40) ? 198 Balance, 12/31/9 Balance Sheet: Assets: Cash and A/R (net) 223 149 Receivable from Street 6 Inventory 88 95 Investment in Street ? Land 55 50 Bldg and Eqp (net) 439 360 Total Assets ? 654 Liab. & SE: Accounts payable 40 20 Payable to Primary 6 Bonds payable 720 100 Common stock 400 330 Retained earnings ? 198 Total Liab. & SE ? 654 1 ACCT4211 Chapters 4 and 5 Homework (Spring 2016) FULL Name: ___________________________ At the end of 208, Primary determined that the goodwill arising in the acquisition of Street is impaired and should be written down by $6,000. Goodwill and its impairment are to be allocated proportionately to the controlling and noncontrolling interests. You might find the following schedule and the worksheet on the last page helpful for you to answer some questions. However, these two are not required and will not be graded. S's SE accounts UNDV NCI Lan B/ CI CS R/E Diff INV d B&E Pat P GW 1/1/9 S's NI Amor of UNDV S's dividends 12/31/9 Note: We don't need to know how much net income reported and how much dividends paid by Street for 208. Required: Determine the dollar amount for the following items. Note: To get full credit, you must show work either through calculation or explanation (for example, \"eliminated\"). You can use the above analysis schedule or worksheet on the last page to show your work. Please let me know whether to find your work clearly (for example, \"Analysis\" or \"Worksheet\"). a. On Primary's internal financial statements: 1. Investment income from Street = _________________ 2. Investment in Street = __________________________ b. On the Primary and Street consolidated income statement: 1. Cost of goods sold = ___________________________ 2. Depreciation expense = _________________________ 3. Amortization expense = ________________________ 4. Interest expense = _____________________________ 2 ACCT4211 Chapters 4 and 5 Homework (Spring 2016) FULL Name: ___________________________ 5. Investment income from Street = _________________ 6. Consolidated net income = ______________________ 7. Consolidated net income attributable to NCI = _______________ 8. Consolidated net income attributable to CI = _________________ c. On the Primary and Street consolidated statement of retained earnings: 1. Dividends paid = ______________________________ 2. Retained earnings as of 12/31/9 = _______________ d. On the Primary and Street consolidated balance sheet: 1. Receivable from Street = _______________________ 2. Inventory = __________________________________ 3. Investment in Street = __________________________ 4. Land = ______________________________________ 5. Buildings and equipment (net) = __________________ 6. Patents = ____________________________________ 7. Goodwill = __________________________________ 8. Payable to Primary = ___________________________ 9. Bonds payable = ______________________________ 10. Common stock = ______________________________ 11. NCI in net assets of Street = _____________________ 3 FULL Name: ___________________________ ACCT4211 Chapters 4 and 5 Homework (Spring 2016) Consolidation Worksheet as of December 31, 209 (in thousands) Consolidation Entries P S Debit Credit Income Statement Sales Cost of goods sold Depreciation expense Amortization expense Interest expense Investment income Net Income To NCI To CI Statement of R/E Balance, 1/1/9 Net income Dividends paid Balance, 12/31/ 9 Balance Sheet Assets: Cash and A/R Receivable from Street Inventory Investment in Street Land Buildings and Eqp. (net) Patents Goodwill Total Assets Liab. & SE: Accounts payable Payable to Primary Bonds payable Common stock Retained earnings NCI in NA of Street Total Liab & SE 390 (280) (55) 235 (114) (45) (36) (6) Consolidated 70 136 (20) 168 70 (40) 198 223 6 88 149 55 439 50 360 95 654 40 720 400 1,585 20 6 100 330 198 654 Proof of debit and credit postings: 1,585 761 = 761 4