Required: (a) Prepare consolidated financial statements on December 31, Year 6. {Input all amounts as positive values except accumulated depreciation which should be indicated by minus sign. Omit $ sign in your response.) ) Answer is not complete. Sales $ 5,900,000 @ 3,080,000 444000 @ 108,000 460,000 @ Cost of zales Miscellaneous expense Admin expense Income tax Admin expense 4,092,000 Attributable to: Pearl's shareholders MNon-controlling interest Pearl Company Consolidated Retained Earnings Statement For the Year Ended December 31, Year 6 Balance Jan. 1 $ 4521090 Net income 1900600 x Answer is complete but not entirely correct. Pearl Company Consolidated Balance Sheet December 31, Year 6 Assets Cash 580,000 Accounts receivable 206,000 Inventory 2,960,000 Plant and equipment 7,040,000 x Accumulated depreciation (1,240,000) X Goodwill OX 9,546,000 Liabilities and Equity Common shares 3,750,000 Retained earnings V 4,553,000 x Non-controlling interests O X Liabilities 1,280,000 $ 9,583,000(b) Calculate goodwill impairment loss and nen-controlling interest on the consolidated income statement for the year ended December 31, Year 6, under the identifiable net assets method. (Omit $ sign in your response.) Goodwill impairment loss L | 25068 o MCI - identifiable net assets method 133408 (c) Calculate goodwill and non-controlling interest on the consolidated balance sheet at December 31, Year 6, under the identifiable net assets method. (Omit $ sign in your response.) Goodwill - identifiable net sssets method $ |33ece0e | NCI - identifiable net assets method I:l Step 4: Calculate Year 4 beginning balance of consolidated retained earnings Calculation of consolidated retained earnings January 1, Year 4 Retained earnings Pearl - Jan 1, Year 6 3,800,000 Retained earnings Silver - Jan 1, Year 6 890.000 Less: Acquisition retained earnings Silver, Jul 1, Year 2 445.000 Increase since acquisition 445.000 Less: Changes to acq. diff. (Jul 1, Year 2 -Jan 1, Year 6) 690.250 From step 2 Adjusted decrease since acquisition -245.250 0.80 -196.200 Consolidated retained earnings Jan 1, Year 4 3.603,800Step 5: Prepare Consolidated Retained Earnings Statement December 31, Year 4 Consolidated retained earnings represent only the parent's portion of retained earnings of the combined entities. Dividends on the consolidated retained earnings are the dividends of the parent only. Consolidated retained earnings Jan 1, Year 4 $ 3,603,800 from Step 4 Add: Net income attributable to Pearl Lid 1,580,200 From Step 3 5.184,000 Less: Dividends (Pearl only) 590,000 Given FS info for Parent Consolidated retained earnings Dec 31, Year 4 S 4,594.000 To Consolidated balance sheet Alternatively: Calculation of consolidated retained earnings Dec. 31. Year 6 Retained earnings Pearl 4.553.000 Retained earnings Silver 1.297,000 Less: Acquisition retained carnings 445.000 Increase since acquisition 852,000 Less: Changes to acq. diff. 800,750 (366,750 + 323,500+ 110,500 from Step 2) Adjusted increase since acquisition 51.250 0.80 41,000 Consolidated retained earnings Dec. 31, Year 6 S 4.594.000 Step 6: Calculate NCI Calculation of non-controlling interest - Dec. 31, Year 6 (Method 1) Silver - Common shares 2,050,000 Silver - Retained earnings 1,297.000 3,347,000 Undepleted acquisition differential 829.250 from step 2 4.176.250 NCI shares at 20% 0.20 NCI December 31, Year 6 S 835.250Stop 7: Prepare Consolidated Balance Sheet Pearl Company Consolidated Balance Sheet December 31, Year 6 BV-Pearl BV-Silver CR Cash 390,000 5 1901000 580,000 BV Parce + BV Sub Accounts receivable 290,000 206,000 BV Parent + BV Sub minus intercompany amount Inventory 2.450,000 510,000 2.960 060 BV Parent + BV Sub (NOTE-FV difference is gone in year after acquistion Plant and equipment 3,450,000 3,590 000 692000 7.623 000 BV Parent + BV Sub - accum depn at acquisition + FV increment at acquisition Accumulated depreciation (840,000) 1400.000) 69.000 366,750 (1,537,750) BY Parent + BV Sub - accum depu at acquisition + accum depn since acquisition on FV increment Investment in Silver Company fat cost) 3,300,000 3300.000 . Eliminate investment on Consolidation Goodwill 544030 344,000 remaining balance from step ? PLUG - Acquisition differential left at and of year s Should never have balance al and Total Assets $ 9,040,000 $ 3,890.000 $ 10375 250 Liabilities 737,000 5 543.000 1,196,009 BV Parent + BV Sub minus intercompany amount Common shares 3.750.000 2.050.090 3.750.060 Parent only Retained camings 4,553,000 1.197.000 41.000 4.594.000 From step 45 Non-controlling interest 845 350 835,250 From step & Total Liabilities and Shareholders' Equity 5 9.0-40,000 5 3,890.000 4.176.294 5 4.176.250 1.265 00 1.265.000 84,000 84,000