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please only answer if you are knowledgable in advanced accounting, thanks On January 1, Year 4, Cytus inc, paid $931,000 in cash to acquire at
please only answer if you are knowledgable in advanced accounting, thanks
On January 1, Year 4, Cytus inc, paid $931,000 in cash to acquire at of the crdinary shares of Keivin Company. Ort that dote, Kelvin's retained earnings were $217,000. All af Kelvin's assets and labilities had fatr values equal to carrylng amounts except for on investment in bonds, which was worth $13.204 more than carrying amount and wit mature on Decesnber 31 , Year 8 . The recoverabie amount for goodwiti was $40.000 at the end of Years 4 and 5 In Year 4, Cyrus reported thet income from its own operutions |exclusive at any income from Kelvin of $142.000 and oeclared no dividends, In Year 4, Kelvin reported net income of $107,000 and paid a $57,000 cash dividend. Cyrus uses the cost method to teport its invostment in Kolvin and uses the effective interost mothod to amortiz premiums or discounts on irvestment in bonds. The amortization of the acquisition differential pertaining to the investument in bonds was $2,693 in Year 4 and $2,684 in Yent 5 , The financial statements for Cyrus and Kelvin for the year ended Docembar 31, Year 5 , were as follows: Required: (a) Prepare a schedule of changes to the ncquisition differential for Years 4 and 5 , (Leave no cells blank - be certain to enter " 0 * wherever required. Negative/Deductible amounts should be indicated by a minus sign. Omit $ sign in your response.) (b) Calculate investment in bonds arid goodwil for the consolidated balance sheet at tho end of Vear 5 . (Omit $ sign in your response.) (c) Calculate investment incorne from Kelvin and investment in Kelvin accourt bolances for Cyrus's separate entity lifancial stataments lor Year 5 , assurning Cyrus uses the, (Omit 5 sign in your response.) (i) Cost method (ii) Equity method (d) Whether the porent's method of accounting for its imvestment in ketvin affect the amount reported for expenses in its December 31 Year 5 , consolidated income statement? Yes No (e) Whetrier the parent's method of sccounting for its invasiment in Kelvin affect the amount reported for investment in bonds in as Cecember 31, Yeat 5, consoldsted batarice sheet? Yeis No (f) What is Cyrus's January 1, Year 5, retained earnings account balonce on its separato entity financial statements assuming Cyrus accounts for its investment in Kelvin using the: (i) Cost method? (ii) Equity method? (Omit $ sign in your response.) (g) Whot are consolidated retained earnings at January 1, Year 5, assuming Cyrus accounts for its investment in Kelvin using the: (1) Cost method? (ii) Equity method? (Omit \$ sign in your response.) Step by Step Solution
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