Additional Information • Pic uses the cost method to account for its investment in Sic. Any acquisition differential is allocated to customer contracts, which are expected to provide future benefits until December: Year 7. Neither company has any customer contracts recorded on their separate-entity records. • There were no unrealized profits from intercompany transactions since the date of acquisition. Required: (a) Calculate consolidated profit attributable to Pic's shareholders for Year 6. (Omit $ sign in your response.) Consolidated profit attributable to Pic's shareholders $144425 O (b) Calculate the following account balances for the consolidated statement of financial posidon at December 31, Year 6: (Omit $ sign in your response.) (1) Customer contracts (ii) Non-controlling interest (iii) Retained earnings $ 174000 $ 21250 $ 737250

Additional Information • Pic uses the cost method to account for its investment in Sic. Any acquisition differential is allocated to customer contracts, which are expected to provide future benefits until December: Year 7. Neither company has any customer contracts recorded on their separate-entity records. • There were no unrealized profits from intercompany transactions since the date of acquisition. Required: (a) Calculate consolidated profit attributable to Pic's shareholders for Year 6. (Omit $ sign in your response.) Consolidated profit attributable to Pic's shareholders $144425 O (b) Calculate the following account balances for the consolidated statement of financial posidon at December 31, Year 6: (Omit $ sign in your response.) (1) Customer contracts (ii) Non-controlling interest (iii) Retained earnings $ 174000 $ 21250 $ 737250

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Additional Information
• Pic uses the cost method to account for its investment in Sic.
• Any acquisition differential is allocated to customer contracts, which are expected to provide future benefits until December 3
Year 7. Neither company has any customer contracts recorded on their separate-entity records.
.
• There were no unrealized profits from intercompany transactions since the date of acquisition.
Required:
(a) Calculate consolidated profit attributable to Pic's shareholders for Year 6. (Omit $ sign in your response.)
Consolidated profit attributable to Pic's shareholders $144425 O
(b) Calculate the following account balances for the consolidated statement of financial position at December 31, Year 6: (Omit $
sign in your response.)
(1) Customer contracts
(ii) Non-controlling interest
(iii) Retained earnings
$ 174000
$ 21250
$ 737250

Problem 08-10 (LO2)
On January 1, Year 5, Pic Company acquired 7,500 ordinary shares of Sic Company for $780,000. On January 1, Year 6, Pic Company
acquired an additional 2,000 ordinary shares of Sic Company for $201,000. On January 1, Year 5, the shareholders' equity of Sic was
as follows:
Ordinary shares (18,008 no par value shares issued)
Retained earnings
The following are the statements of retained earnings for the two companies for Years 5 and 6:
Sic
Year 5 Year 6
$318,000 $333,500
105,500
181,500
(90,000) (90,000)
$333,500 $425,000
Retained earnings, beginning of year
Profit
Dividends
Retained earnings, end of year
$200,000
318,000
$518,000
Pic
Year 5
$ 536,000
Year 6
$ 583,500
147,500 177,500
(100,000) (120,000)
$ 583,500 $ 641,000

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