XC0 acquired 80% of Y C0 on January 1, Year 3, when Y Co had common shares of $110,000 and retained earnings of $71,000. The acquisition differential was allocated as follows on this date Since this date the following events have occurred Year 3 - Y Co. reported a net income of $131,000 and paid dividends of $26,000, - On July 3,XC0 sold land to Y Co. for $114,000. This land was carried in the records of XCo at $76,000 - On December 31, Year 3 , the inventory of X Co. contained an intercompany profit or $31,000 - XC0, reported a net income of $410,000 from its own operations. Yeor 4 - YCo, reported a net loss of $17,000 and paid dividends of $6,000. - YCo. sold the land that it purchased from X Co. to an unrelated company for $131,000 - On December 31 , Yeat 4 , the inventory of YC0 contained an intercompany profit of $13,000 - X Co. reported a net income from its own operations of $73.000. Required: Assume a 40% tax rate. (o) Prepare X Co's equity method journal entries subsequent to the date of acquisition for each of Years 3 and 4 . (Input all values as positive numbers, If no entry is required for o transoction/event, select "No journal entry required" in the first occount fieid, input all values os positive numbers.) positive numbers. If no entry is required for o transaction/event, select "No journal entry required" in the first account field. Input all values as positive numbers.) Yeor 3 Year 4 (b) Calculate consolidated net income attributable to Co0 's shareholders for each of Years 3 and 4. (Omit $ sign in your response.) (c) Prepare a statement showing the changes in non-controlling interest in each of Years 3 and 4. (Net loss amount should be indicated with a minus sign ond input all other omounts as positive values. Omit $ sign in your response.) (d) Now assume that XC0. is a private company, uses ASPE, and chooses to use the equity method. Calculate the balance in the investment in YC0. account as at December 31 , Year 4 . (Omit $ sign in your response.) Investment in Y Co - December 31, Year 4 $ XC0 acquired 80% of Y C0 on January 1, Year 3, when Y Co had common shares of $110,000 and retained earnings of $71,000. The acquisition differential was allocated as follows on this date Since this date the following events have occurred Year 3 - Y Co. reported a net income of $131,000 and paid dividends of $26,000, - On July 3,XC0 sold land to Y Co. for $114,000. This land was carried in the records of XCo at $76,000 - On December 31, Year 3 , the inventory of X Co. contained an intercompany profit or $31,000 - XC0, reported a net income of $410,000 from its own operations. Yeor 4 - YCo, reported a net loss of $17,000 and paid dividends of $6,000. - YCo. sold the land that it purchased from X Co. to an unrelated company for $131,000 - On December 31 , Yeat 4 , the inventory of YC0 contained an intercompany profit of $13,000 - X Co. reported a net income from its own operations of $73.000. Required: Assume a 40% tax rate. (o) Prepare X Co's equity method journal entries subsequent to the date of acquisition for each of Years 3 and 4 . (Input all values as positive numbers, If no entry is required for o transoction/event, select "No journal entry required" in the first occount fieid, input all values os positive numbers.) positive numbers. If no entry is required for o transaction/event, select "No journal entry required" in the first account field. Input all values as positive numbers.) Yeor 3 Year 4 (b) Calculate consolidated net income attributable to Co0 's shareholders for each of Years 3 and 4. (Omit $ sign in your response.) (c) Prepare a statement showing the changes in non-controlling interest in each of Years 3 and 4. (Net loss amount should be indicated with a minus sign ond input all other omounts as positive values. Omit $ sign in your response.) (d) Now assume that XC0. is a private company, uses ASPE, and chooses to use the equity method. Calculate the balance in the investment in YC0. account as at December 31 , Year 4 . (Omit $ sign in your response.) Investment in Y Co - December 31, Year 4 $
