Question 4.8

Having trouble especially with the consolidated statement of comprehensive income for 2018

4:14 PM 2% cambridgepub com Google Drive Cloud Storage & File Backup for Photos, Docs Cam 167 Auto Zoom Capital stock 5,000 2,000 25,000) Retained earnings, Jan 6,000 25,000 Sales revenue 4.000 Equity in net income of Sharbot 400 20,000 Cost of sales 8,000 Operating expenses 4,000 3.500 $0 Tota $0 In your answers below, show all amounts in thousands Required a. Prepare the working paper to consolidate Perth and Sharbot's trial balances at December 31, 2017 Prepare the consolidated income s atement for 2017, and the consolidated balance sheet at December 31, 2017, in good form C Lo 1,3 P4.8 Consolidation Working Paper, Three Years After Acquisition (see related P3.2 Interna- tional Technology Inc. (ITI) acquired all of the voting stock of Global Outsourcing Corporation (GOC) on June 30, 2015, for $110 million in cash and stock, plus an earnings contingency payable at the end of the third year with a fair value of $2 million at the date of acquisition. Within the measurement period, the earnings contingency dec ed to a fair value of zero and the acquisition price was appropriately adjusted Both companies have a June 30 year-end. At June 30, 2015, GOC's total stockholders' equity was $40 million, as follows (in million Chapter 4 Consolidated Financial Statements Subsequent to Acquisition 167 4 Common stock, par Additional paid-in capital 60 Retained earnings (defic 25 Accumulated other comprehensive income Treasury stock Tota $40 At the acquisition date, GOC's inventories were undervalued b property, plant and equip on ment was overvalued by $60 million, its reported patents and trademarks were undervalued by $10 million, and its long-term debt was undervalued by $3 million. GOC also had previously unreported identifiable intangibles: $5 million of advanced technology and $25 million of customer lists. GOC re ports its inventory using the LIFO method, and purchases exceed sales every year. The acquisition date emaining lives of es are as follows assets and liab Property, plant and equipment, net 20 years Patents and trademarks. 5 years Advanced technology. 5 years Customer Indefinite sts Long-term debt 3 years ed for mited life asse sts were $2 The straight-line method is osses on the customer mpairmen million in fiscal 2017 and $4 million in fiscal 2018. Goodwill impairment loss were $2 m on in fiscal on in fiscal 2017, and $2 m 2016, $3 m on in fiscal 2018 GOC reported net income of $15 million in fiscal 2016, and a net loss of $2 million in fiscal 2017 Neither company pays dividends. ITI uses the complete equity method to account for its investment in GOC on its own books. The trial balances of ITI and GOC at June 30, 2018, are as follows Dr (Cr (in millions) GOC 4:14 PM 2% cambridgepub com Google Drive Cloud Storage & File Backup for Photos, Docs Cam 167 Auto Zoom Capital stock 5,000 2,000 25,000) Retained earnings, Jan 6,000 25,000 Sales revenue 4.000 Equity in net income of Sharbot 400 20,000 Cost of sales 8,000 Operating expenses 4,000 3.500 $0 Tota $0 In your answers below, show all amounts in thousands Required a. Prepare the working paper to consolidate Perth and Sharbot's trial balances at December 31, 2017 Prepare the consolidated income s atement for 2017, and the consolidated balance sheet at December 31, 2017, in good form C Lo 1,3 P4.8 Consolidation Working Paper, Three Years After Acquisition (see related P3.2 Interna- tional Technology Inc. (ITI) acquired all of the voting stock of Global Outsourcing Corporation (GOC) on June 30, 2015, for $110 million in cash and stock, plus an earnings contingency payable at the end of the third year with a fair value of $2 million at the date of acquisition. Within the measurement period, the earnings contingency dec ed to a fair value of zero and the acquisition price was appropriately adjusted Both companies have a June 30 year-end. At June 30, 2015, GOC's total stockholders' equity was $40 million, as follows (in million Chapter 4 Consolidated Financial Statements Subsequent to Acquisition 167 4 Common stock, par Additional paid-in capital 60 Retained earnings (defic 25 Accumulated other comprehensive income Treasury stock Tota $40 At the acquisition date, GOC's inventories were undervalued b property, plant and equip on ment was overvalued by $60 million, its reported patents and trademarks were undervalued by $10 million, and its long-term debt was undervalued by $3 million. GOC also had previously unreported identifiable intangibles: $5 million of advanced technology and $25 million of customer lists. GOC re ports its inventory using the LIFO method, and purchases exceed sales every year. The acquisition date emaining lives of es are as follows assets and liab Property, plant and equipment, net 20 years Patents and trademarks. 5 years Advanced technology. 5 years Customer Indefinite sts Long-term debt 3 years ed for mited life asse sts were $2 The straight-line method is osses on the customer mpairmen million in fiscal 2017 and $4 million in fiscal 2018. Goodwill impairment loss were $2 m on in fiscal on in fiscal 2017, and $2 m 2016, $3 m on in fiscal 2018 GOC reported net income of $15 million in fiscal 2016, and a net loss of $2 million in fiscal 2017 Neither company pays dividends. ITI uses the complete equity method to account for its investment in GOC on its own books. The trial balances of ITI and GOC at June 30, 2018, are as follows Dr (Cr (in millions) GOC