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Q2: (20 marks, 5 marks per sub-question) A: Bilal Company acquired 80% of the outstanding common stock of Salwa Company on January 2, 2020 for
Q2: (20 marks, 5 marks per sub-question) A: Bilal Company acquired 80% of the outstanding common stock of Salwa Company on January 2, 2020 for 380,000. At that time, Salwa's total stockholders' equity amounted to 325,000. Salwa Company reported net income 85,000 and distributed dividends 55,000 for the years ended Dec. 31,2020. Assuming the difference between implied value and the book value of equity acquired was attributed solely to goodwill that was expected to worth 100,000 as at the end of year 2020. Required: Compute the equity in subsidiary income account under the complete equity method for the year ended Dec.,31,2020
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