On January 1, Year 5, Pic Company acquired 7.500 ordinary shares of Sic Company for $717,000. On January 1, Year 6. Pic Company acquired an additional 2,000 ordinary shares of Sic Company for $210,000. On January 1, Year 5, the shareholders' equity of Sic was as follows: Ordinary shares (10,000 no par value shares issued) Retained earnings sic The following are the statements of retained earnings for the two companies for Years 5 and 6: Retained earnings, beginning of year Profit Dividends Retained earnings, end of year $200,000 330,000 $530,000 Pic (1) Customer contracts (ii) Non-controlling interest (iii) Retained earnings Year 5 Year 6 $ 542,000 $ 593,000 151,000 162,000 (100,000) (120,000) $ 593,000 Year 5 Year 6 $ 330,000 $ 353,000 113,000 148,000 (90,000) (90,000) $635,000 $ 353,000 $ 411,000 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 31, 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 $ (b) Calculate the following account balances for the consolidated statement of financial position at December 31, Year 6: (Omit $ sign In your response.)
On January 1, Year 5, Pic Company acquired 7.500 ordinary shares of Sic Company for $717,000. On January 1, Year 6. Pic Company acquired an additional 2,000 ordinary shares of Sic Company for $210,000. On January 1, Year 5, the shareholders' equity of Sic was as follows: Ordinary shares (10,000 no par value shares issued) Retained earnings sic The following are the statements of retained earnings for the two companies for Years 5 and 6: Retained earnings, beginning of year Profit Dividends Retained earnings, end of year $200,000 330,000 $530,000 Pic (1) Customer contracts (ii) Non-controlling interest (iii) Retained earnings Year 5 Year 6 $ 542,000 $ 593,000 151,000 162,000 (100,000) (120,000) $ 593,000 Year 5 Year 6 $ 330,000 $ 353,000 113,000 148,000 (90,000) (90,000) $635,000 $ 353,000 $ 411,000 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 31, 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 $ (b) Calculate the following account balances for the consolidated statement of financial position at December 31, Year 6: (Omit $ sign In your response.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, Year 5, Pic Company acquired 7.500 ordinary shares of Sic Company for $717,000. On January 1, Year 6. Pic Company
acquired an additional 2,000 ordinary shares of Sic Company for $210,000. On January 1, Year 5, the shareholders' equity of Sic was
as follows:
Ordinary shares (10,000 no par value shares issued)
Retained earnings
The following are the statements of retained earnings for the two companies for Years 5 and 6:
.
Retained earnings, beginning of year
Profit
Dividends
Retained earnings, end of year
(1) Customer contracts
(ii) Non-controlling interest
(iii) Retained earnings
555
Pic
$
$200,000
330,000
$530,000
Year 5
$ 542,000
151,000
(100,000)
$ 593,000
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 31, 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.
$
Year 5
$ 330,000
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
(b) Calculate the following account balances for the consolidated statement of financial position at December 31, Year 6: (Omit $ sign
In your response.)
Sic
Year 6
$ 593,000
Year 6
$ 353,000
148,000
(98,000)
162,000
(120,000)
113,000
(90,000)
$ 635,000 $ 353,000 $ 411,000
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