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 $197,000. 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 Additional Information $200,000 321,000 $521,000 Pic Year 5 Year 6 $ 542,000 $ 593,000 151,000 153,000 (100,000) (120,000) $ 626,000 $ 593,000 Sic Year 5 $ 321,000 113,000 (90,000) 148,000 (90,000) $ 344,000 $ 402,000 Year 6 $ 344,000 • 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 $197,000. 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 Additional Information $200,000 321,000 $521,000 Pic Year 5 Year 6 $ 542,000 $ 593,000 151,000 153,000 (100,000) (120,000) $ 626,000 $ 593,000 Sic Year 5 $ 321,000 113,000 (90,000) 148,000 (90,000) $ 344,000 $ 402,000 Year 6 $ 344,000 • 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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Please don't give image format and both solve
Transcribed Image Text:(b) Calculate the following account balances for the consolidated statement of financial position at December 31, Year 6: (Omit $ sign
in your response.)
(i) Customer contracts
(ii) Non-controlling interest
(iii) Retained earnings
$
$
$
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 $197,000. 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
Additional Information
$200,000
321,000
$521,000
Pic
Year 5
$ 542,000
Year 6
$ 593,000
151,000 153,000
(100,000) (120,000)
$ 626,000
$ 593,000
Year 5
$ 321,000
Sic
Year 6
$ 344,000
148,000
113,000
(90,000)
$ 344,000 $ 402,000
(90,000)
• 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.)
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