Required:

1) Prepare a consolidated statement of financial position at the acquisition date.

2) Prepare a set of consolidated financial statements for 20X2.

3) Calculate Victorys consolidated retained earnings for 20X3. Do not prepare financial statements.

I was able to get the answer to #1, but am strugging with 2 & 3.

2. On January 2, 202, Victory Co. acquired 60% of the shares of Sauce Ltd. by issuing shares valued at $1,500,000. On this date, Sauce's building and machinery had estimated remaining useful lives of 10 years and 5 years, respectively. Both Statements of Financial Position Victory and Sauce use straight-line depreciation. The separate-entity statements of As of December 31,202 financial position for Victory and Sauce just prior to the acquisition are presented below. (80 marks) Statements of Financial Position As of January 1,202 Statements of Comprehensive Income For the year ended December 31, 20X2 Statements of Change in Equity - Retained Earnings Section For the year ended December 31, 20X2 During 20X2, Victory and Sauce had the following transactions between them: - On June 30, 20X2, Sauce borrowed $500,000 from Victory at an interest rate of 10% (simple interest). Interest is to be paid at the end of each calendar year. Sauce did not pay the 202 interest. - During 20X2, Sauce sold $4,000,000 of goods to Victory. At the end of 20X2, $1,000,000 of those goods were still in Victory's ending inventory. Sauce charged Victory the same price it charges all its other customers. - During 20X2, Victory sold $2,000,000 of goods to Sauce. At the end of 20X2, $400,000 of those goods were still in Sauce's ending inventory. Victory charged Sauce the same price it charges all its other customers. There was no impairment of goodwill for 20X2. Statements of Financial Position As of December 31, 20X3 Statements of Change in Equity - Retained Earnings Section For the year ended December 31, 20X3 Additional information for 203 : - During 20X3, Victory purchase $1,600,000 in goods from Sauce. At the end of the year, half of these goods were still in Victory's inventory. - During December 20X3, Sauce purchased $400,000 in goods from Victory. At the end of the year, all of these goods were still in Sauce's inventory. - Both Victory and Sauce's gross margins for these goods were unchanged from previous years. - At the end of 20X3, Sauce did not pay the interest due on the loan from Victory, however, both companies had accrued the interest. Required: Statements of Comprehensive Income For the year ended December 31,203 2. On January 2, 202, Victory Co. acquired 60% of the shares of Sauce Ltd. by issuing shares valued at $1,500,000. On this date, Sauce's building and machinery had estimated remaining useful lives of 10 years and 5 years, respectively. Both Statements of Financial Position Victory and Sauce use straight-line depreciation. The separate-entity statements of As of December 31,202 financial position for Victory and Sauce just prior to the acquisition are presented below. (80 marks) Statements of Financial Position As of January 1,202 Statements of Comprehensive Income For the year ended December 31, 20X2 Statements of Change in Equity - Retained Earnings Section For the year ended December 31, 20X2 During 20X2, Victory and Sauce had the following transactions between them: - On June 30, 20X2, Sauce borrowed $500,000 from Victory at an interest rate of 10% (simple interest). Interest is to be paid at the end of each calendar year. Sauce did not pay the 202 interest. - During 20X2, Sauce sold $4,000,000 of goods to Victory. At the end of 20X2, $1,000,000 of those goods were still in Victory's ending inventory. Sauce charged Victory the same price it charges all its other customers. - During 20X2, Victory sold $2,000,000 of goods to Sauce. At the end of 20X2, $400,000 of those goods were still in Sauce's ending inventory. Victory charged Sauce the same price it charges all its other customers. There was no impairment of goodwill for 20X2. Statements of Financial Position As of December 31, 20X3 Statements of Change in Equity - Retained Earnings Section For the year ended December 31, 20X3 Additional information for 203 : - During 20X3, Victory purchase $1,600,000 in goods from Sauce. At the end of the year, half of these goods were still in Victory's inventory. - During December 20X3, Sauce purchased $400,000 in goods from Victory. At the end of the year, all of these goods were still in Sauce's inventory. - Both Victory and Sauce's gross margins for these goods were unchanged from previous years. - At the end of 20X3, Sauce did not pay the interest due on the loan from Victory, however, both companies had accrued the interest. Required: Statements of Comprehensive Income For the year ended December 31,203