Question $2(20$ marks$)$

Cert purchased $88\%$ of Fiy$$s common shares for $$275,000$ on June $1,$ Year $4.$ Cert

and Fiy Inc. had the following balance sheets on June $1,$ Year $4$ prior to the purchase:

Cert Fiy Fair Value

Cash $$225,000$ $$57,500$ $$57,500$ Question $2(20$ marks$)$

Cert purchased $88\%$ of Fiy's common shares for $$275,000$ on June $1,$ Year $4.$ Cert

and Fiy Inc. had the following balance sheets on June $1,$ Year $4$ prior to thepurchase:

Required

a$)$ Prepare the journal entry to record the purchase of Fiy's common shares onJune

$1,$ Year $4.$

b$)$ Prepare calculation and allocation of acquisition differential schedule and the

consolidated balance sheet at June $1,$ Year $4($in good format and write out all

words completely, including titles and account names. Include all #s in

brackets on the consolidated BS: CV $+$ CV $+/-$ FVIs$)$

c$)$ Calculate goodwill and non$-$controlling interest balances that would appear on the

consolidated balance sheet on June $1,$ Year $4$ under the Identifiable Net Assets

$($INA$)$ method.

Hints: Goodwill $=$$$132,227$; Consolidated BS total assets $=$$$1,033,227$

Accounts Receivable $42,50032,50030,000$

Inventory $95,00068,00075,000$

Plant and Equipment $($net$)340,000250,000240,000$

Trademark $28,00036,000$

Total Assets $$702,500$ $$436,000$

Accounts Payable $$127,500$ $$80,000$ $$80,000$

Bonds Payable $400,000215,000218,000$

Common Shares $145,00090,000$

Retained Earnings $30,00051,000$

Total Liabilities and Equity $$702,500$ $$436,000$

Required

a$)$ Prepare the journal entry to record the purchase of Fiy$$s common shares onJune

$1,$ Year $4.$

b$)$ Prepare calculation and allocation of acquisition differential schedule and the

consolidated balance sheet at June $1,$ Year $4($in good format and write out all

words completely, including titles and account names. Include all #s in

brackets on the consolidated BS: CV $+$ CV $+/-$ FVIs$)$

c$)$ Calculate goodwill and non$-$controlling interest balances that would appear on the

consolidated balance sheet on June $1,$ Year $4$ under the Identifiable Net Assets

$($INA$)$ method.

Hints: Goodwill $=$ $$132,227$; Consolidated BS total assets $=$ $$1,033,227$