Required: Use proper three-line titles for all statements.

1. Calculate the acquisition differential, goodwill and non-controlling interest at acquisition date, December 31, 2012. (6 marks)
2. Prepare the acquisition eliminating entry at acquisition date on the consolidation worksheet. (4 marks)
3. What would be the value of NCI and goodwill at acquisition date if P had used the identifiable net asset theory to prepare consolidated statements. (4 mark)
4. Prepare the schedule of amortization of acquisition differential and impairment. (6 marks)
5. Calculate consolidated net income for the year ended December 31, 2016. Separate the portion attributable to P and to non-controlling interest. (6 marks)
6. Prepare the consolidated income statement for year 6. Show attribution to each shareholder group. (8 marks)

Share Comments AutoSave OF AAGO ... Assignment 2 Chapter 5 part 1 (includes a chapter 4 part) Home Insert Draw Design Layout References Mailings Review View Table Design Layout Tell me - X Calibri (Bo... v 12 "A A Ever 21 Aalhandle Aalhandle AaBbccc C Pastc B BI U va x x APA Normal No Spang Heating Dictate Styles Pane Sensitivity Editor Dacument Cloud Show Teskpane On December 31, 2012, P Inc. purchased 80% of the outstanding ordinary shares of S Company for $310,000. At that date, S had ordinary shares of $200,000 and retained earnings of $60,000. In negotiating the purchase price, it was agreed that the assets on S's statement of financial position were fairly valued except for plant assets, which had a $40,000 excess of fair value over carrying amount. It was also agreed that S had unrecognized intangible assets consisting of trademarks that had an estimated value of $24,000. The plant assets had a remaining useful life of eight years at the acquisition date and the trademarks would be amortized over a 12-year period. Any goodwill arising from this business combination would be tested periodically for impairment. P accounts for its investment using the cost method and uses the fair value enterprise (entity) theory to prepare consolidated statements. Additional Information: At December 31, 2016, an impairment test of S's goodwill revealed its recoverable amount is $50,000 An impairment test indicated that the trademarks had a recoverable amount of $13,750. The impairment loss on these assets (goodwill and trademarks) occurred entirely in 2016. On December 26, 2016, P declared dividends of $36,000, while s declared dividends of $15,000. Amortization expense is reported in selling expenses, while impairment losses are reported # in other expenses. Financial statements for P and S for the year ended December 31, 2016, were as follows: STATEMENTS OF FINANCIAL POSITION December 31, 2016 P S Assets Plant assets- S $ 230,000 $ 160,000 net Investment in Storm 310,000 Other 82,000 22,000 investments Notes 10,000 receivable Inventory 100,000 180,000 Accounts 88,000 receivable Cash 20,000 30,000 160,000 $ 830,000 $ 562,000 Page 1 of 2 496 words E English (Canada) Focus EL + 130% AutoSave OF AAGO ... Assignment 2 Chapter 5 part 1 (includes a chapter 4 part) Insert Home - Draw Design Layout References Mailings Review View Table Design Layout Tell me Share Comments Calibri (Bo... v 12 X C "A A Ev Evl21 0 A AaRCode AaBbccc Aalbonde Nr: Sparing Pastc Num B BI U va x x = = = = Heating Y v Dictate Y Y Styles Pane Sensitivity Y Editor Dacument Cloud Show Teskpane $ 500,000 $ 110,000 Shareholders' Equity and Liabilities Ordinary shares Retained earnings Notes payable Other current liabilities Accounts payable 200,000 150,000 100,000 130,000 10,000 50,000 80,000 62,000 $ 830,000 $ 562,000 INCOME STATEMENTS For the year ended December 31, 2016 P Sales $ 870,000 $ Cost of goods sold (638,000) 515,000 (360,000) $ $ Gross profit Selling expenses Other expenses Interest and dividend income 232,000 (22,000) (148,000) 34,000 155,000 (35,000) (72,000) 2.000 Profit $ 96,000 $ 50,000 Page 2 of 2 496 words CS English (Canada) Focus EL + 130% Share Comments AutoSave OF AAGO ... Assignment 2 Chapter 5 part 1 (includes a chapter 4 part) Home Insert Draw Design Layout References Mailings Review View Table Design Layout Tell me - X Calibri (Bo... v 12 "A A Ever 21 Aalhandle Aalhandle AaBbccc C Pastc B BI U va x x APA Normal No Spang Heating Dictate Styles Pane Sensitivity Editor Dacument Cloud Show Teskpane On December 31, 2012, P Inc. purchased 80% of the outstanding ordinary shares of S Company for $310,000. At that date, S had ordinary shares of $200,000 and retained earnings of $60,000. In negotiating the purchase price, it was agreed that the assets on S's statement of financial position were fairly valued except for plant assets, which had a $40,000 excess of fair value over carrying amount. It was also agreed that S had unrecognized intangible assets consisting of trademarks that had an estimated value of $24,000. The plant assets had a remaining useful life of eight years at the acquisition date and the trademarks would be amortized over a 12-year period. Any goodwill arising from this business combination would be tested periodically for impairment. P accounts for its investment using the cost method and uses the fair value enterprise (entity) theory to prepare consolidated statements. Additional Information: At December 31, 2016, an impairment test of S's goodwill revealed its recoverable amount is $50,000 An impairment test indicated that the trademarks had a recoverable amount of $13,750. The impairment loss on these assets (goodwill and trademarks) occurred entirely in 2016. On December 26, 2016, P declared dividends of $36,000, while s declared dividends of $15,000. Amortization expense is reported in selling expenses, while impairment losses are reported # in other expenses. Financial statements for P and S for the year ended December 31, 2016, were as follows: STATEMENTS OF FINANCIAL POSITION December 31, 2016 P S Assets Plant assets- S $ 230,000 $ 160,000 net Investment in Storm 310,000 Other 82,000 22,000 investments Notes 10,000 receivable Inventory 100,000 180,000 Accounts 88,000 receivable Cash 20,000 30,000 160,000 $ 830,000 $ 562,000 Page 1 of 2 496 words E English (Canada) Focus EL + 130% AutoSave OF AAGO ... Assignment 2 Chapter 5 part 1 (includes a chapter 4 part) Insert Home - Draw Design Layout References Mailings Review View Table Design Layout Tell me Share Comments Calibri (Bo... v 12 X C "A A Ev Evl21 0 A AaRCode AaBbccc Aalbonde Nr: Sparing Pastc Num B BI U va x x = = = = Heating Y v Dictate Y Y Styles Pane Sensitivity Y Editor Dacument Cloud Show Teskpane $ 500,000 $ 110,000 Shareholders' Equity and Liabilities Ordinary shares Retained earnings Notes payable Other current liabilities Accounts payable 200,000 150,000 100,000 130,000 10,000 50,000 80,000 62,000 $ 830,000 $ 562,000 INCOME STATEMENTS For the year ended December 31, 2016 P Sales $ 870,000 $ Cost of goods sold (638,000) 515,000 (360,000) $ $ Gross profit Selling expenses Other expenses Interest and dividend income 232,000 (22,000) (148,000) 34,000 155,000 (35,000) (72,000) 2.000 Profit $ 96,000 $ 50,000 Page 2 of 2 496 words CS English (Canada) Focus EL + 130%