the fair value of the noncontrolling interest was $45,500. Suspect reported retained earnings of $50,000 and had $100,000 of common stock outstanding. Prime uses the fully adjusted equity method in accounting for its investment in Suspect. Trial balance data for the two companies on December 31,206, are as follows: Additional information 1. At the date of combination, the book values and fair values of all separately identifiable assets and liabilities of Suspect were the same. At December 31, 206, the management of Prime reviewed the amount attributed to goodwill as a result of its purchase of Suspect stock and concluded an impairment loss of $20,475 should be recognized in 206 and shared proportionately between the controlling and noncontrolling shareholders. 2. On January 1, 205, Suspect sold land that had cost $10,000 to Prime for $22,500. 3. On January 1, 20X6, Prime sold to Suspect equipment that it had purchased for $82,500 on January 1,201. The equipment has a total economic life of 15 years and was sold to Suspect for $69,500, Both companies use straight-line depreciation. 4. There was $5,500 of intercompany receivables and payables on December 31,206. \begin{tabular}{|l|l|} \hline \multicolumn{2}{|c|}{ PRIME COMPANY AND SUBSIDIARY } \\ \hline \multicolumn{2}{|c|}{ Consolidated Rotained Earnings Statement } \\ \hline \multicolumn{1}{|c|}{ Year Ended December 31, 20X6 } \\ \hline Retained Earnings, January 1, 20X6 & \\ \hline income to Controlling interest, 20X6 & \\ \hline & $ \\ \hline Dividends Declared, 20X6 & \\ \hline Retained Earnings, December 31, 20X6 & $ \\ \hline \end{tabular} c. Prepare a consolidated balance sheet, income statement, and retained earnings statement for 206, (Be sure to list the assets and liabilities in order of their liquidity. Amount to be deducted should be indicated by a minus sign.) Prime Company holds 80 percent of Suspect Company's stock, acquired on January 1, 202, for $182,000. On the acquisition date, the fair value of the noncontrolling interest was $45,500. Suspect reported retained earnings of $50,000 and had $100,000 of common stock outstanding. Prime uses the fully adjusted equity method in accounting for its investment in Suspect. Trial balance data for the two companies on December 31,206, are as follows: Additional Information 1. At the date of combination, the book values and fair values of all separately identifiable assets and liabilities of Suspect were the same. At December 31,206, the management of Prime reviewed the amount attributed to goodwill as a result of its purchase of Suspect stock and concluded an impairment loss of $20.475 should be recognized in 206 and shared proportionately between the controlling and noncontroling shareholders. 2. On January 1, 205, Suspect sold land that had cost $10,000 to Prime for $22,500, 3. On January 1,206, Prime sold to Suspect equipment that it had purchased for $82,500 on January 1,201. The equipment has a total economic life of 15 years and was sold to Suspect for $69,500. Both companies use straight-line depreciation. 4. There was $5,500 of intercompany recelvables and payables on December 31,206. the fair value of the noncontrolling interest was $45,500. Suspect reported retained earnings of $50,000 and had $100,000 of common stock outstanding. Prime uses the fully adjusted equity method in accounting for its investment in Suspect. Trial balance data for the two companies on December 31,206, are as follows: Additional information 1. At the date of combination, the book values and fair values of all separately identifiable assets and liabilities of Suspect were the same. At December 31, 206, the management of Prime reviewed the amount attributed to goodwill as a result of its purchase of Suspect stock and concluded an impairment loss of $20,475 should be recognized in 206 and shared proportionately between the controlling and noncontrolling shareholders. 2. On January 1, 205, Suspect sold land that had cost $10,000 to Prime for $22,500. 3. On January 1, 20X6, Prime sold to Suspect equipment that it had purchased for $82,500 on January 1,201. The equipment has a total economic life of 15 years and was sold to Suspect for $69,500, Both companies use straight-line depreciation. 4. There was $5,500 of intercompany receivables and payables on December 31,206. \begin{tabular}{|l|l|} \hline \multicolumn{2}{|c|}{ PRIME COMPANY AND SUBSIDIARY } \\ \hline \multicolumn{2}{|c|}{ Consolidated Rotained Earnings Statement } \\ \hline \multicolumn{1}{|c|}{ Year Ended December 31, 20X6 } \\ \hline Retained Earnings, January 1, 20X6 & \\ \hline income to Controlling interest, 20X6 & \\ \hline & $ \\ \hline Dividends Declared, 20X6 & \\ \hline Retained Earnings, December 31, 20X6 & $ \\ \hline \end{tabular} c. Prepare a consolidated balance sheet, income statement, and retained earnings statement for 206, (Be sure to list the assets and liabilities in order of their liquidity. Amount to be deducted should be indicated by a minus sign.) Prime Company holds 80 percent of Suspect Company's stock, acquired on January 1, 202, for $182,000. On the acquisition date, the fair value of the noncontrolling interest was $45,500. Suspect reported retained earnings of $50,000 and had $100,000 of common stock outstanding. Prime uses the fully adjusted equity method in accounting for its investment in Suspect. Trial balance data for the two companies on December 31,206, are as follows: Additional Information 1. At the date of combination, the book values and fair values of all separately identifiable assets and liabilities of Suspect were the same. At December 31,206, the management of Prime reviewed the amount attributed to goodwill as a result of its purchase of Suspect stock and concluded an impairment loss of $20.475 should be recognized in 206 and shared proportionately between the controlling and noncontroling shareholders. 2. On January 1, 205, Suspect sold land that had cost $10,000 to Prime for $22,500, 3. On January 1,206, Prime sold to Suspect equipment that it had purchased for $82,500 on January 1,201. The equipment has a total economic life of 15 years and was sold to Suspect for $69,500. Both companies use straight-line depreciation. 4. There was $5,500 of intercompany recelvables and payables on December 31,206
