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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 Ss 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.

Additional Information:

	At December 31, 2016, an impairment test of Ss 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 $20,000.
	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:

1. Calculate the ending balance of consolidated retained earnings at December 31, 2016. (5 marks)
2. Calculate the ending balance of non-controlling interest that would appear on the consolidated balance sheet at December 31, 2016 (5 marks)
3. Prepare the consolidated statement of changes in equity for the year ended December 31, 2016. (5 marks)
4. Calculate the balance of Plant Assets @ net that would show on the consolidated balance sheet at December 31, 2016. (2 marks)
5. Calculate the balance of ordinary (common) shares on the consolidated balance sheet at December 31, 2016. (2 marks)
6. Prepare the consolidated balance sheet at December 31, 2016 (8 marks)
7. Assume that P used the equity method to record its investment in S. What would be the value of the Investment in S account on the Ps separate entity balance sheet at December 31, 2016. (3 marks)

A APP STORE 1:57 PM Updates Available Do you want to install the updates now? Talking: James Fowler Sensitivity Cloud Taakpane Dictate Y AutoSave OF AA problem assignment 3 Chpt 5 part 2 - Saved to my Mac Home Insert Draw Design Layout References Mailings Review View Tell me Calibri (Bo... v B. ~ A A Ever 21 Albacete Aarodie AaBbccd G Paste B I U ab x x Uv AvA Nurmi Ne Spang Heating Styles Pane 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-net $ 230,000 $ 160,000 Investment in Storm 310,000 Other investments 82,000 22,000 Notes receivable - 10,000 Inventory 100,000 180,000 Accounts receivable 88,000 160,000 20,000 30,000 $ 830,000 $ 562,000 Shareholders' Equity and Liabilities Ordinary shares $ 500,000 $ 200,000 Retained earnings 110,000 150,000 Notes payable 130,000 100,000 Other current 10,000 50,000 liabilities Accounts payable 80,000 62,000 Cash $ 830,000 $ 562,000 INCOME STATEMENTS For the year ended December 31, 2016 P $ 870,000 $ s 515,000 Sales Page 1 of 2 214 of 505 words LE English Canada Focus EL + 130% AutoSave OF AA problem assignment 3 Chpt 5 part 2 - Saved to my Mac - Review View Tell me Home Insert Draw Design Layout References Mailings Calibri (Bo... v B. ~ A Aav E 1 A APP STORE 1:57 PM Updates Available Do you want to install the updates now? Talking: James Fowler Sensitivity Cloud Taakpane AaBhandle AaBbcc G Aalbondie Nr: Sparing Paste B I U ab xx Uv APA Now! = = = = Heating Y Dictate Styles Pane INCOME STATEMENTS For the year ended December 31, 2016 Sales $ 870,000 $ Cost of goods sold (638,000) s 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 a. Calculate the ending balance of consolidated retained earnings at December 31, 2016. (5 marks) b. Calculate the ending balance of non-controlling interest that would appear on the consolidated balance sheet at December 31, 2016 (5 marks) c. Prepare the consolidated statement of changes in equity for the year ended December 31, 2016. (5 marks) d. Calculate the balance of "Plant Assets @net" that would show on the consolidated balance sheet at December 31, 2016. (2 marks) e. Calculate the balance of ordinary (common) shares on the consolidated balance sheet at December 31, 2016. (2 marks) f. Prepare the consolidated balance sheet at December 31, 2016 (8 marks) g. Assume that P used the equity method to record its investment in S. What would be the value of the Investment in Saccount on the P's separate entity balance sheet at December 31, 2016. (3 marks) Page 2 of 2 214 of 505 words CE English (Canada) Focus EL + 130%