Homework Help is Here – Start Your Trial Now!
Business
Accounting
On January 1, Year 5, Pic Company acquired 7,500 ordinary shares of Sic Company for $726,000. On January 1, Year 6, Pic Company acquired an additional 2,000 ordinary shares of Sic Company for $260,000. On January 1, Year 5, the shareholders' equity of Sic was as follows: Ordinary shares (10,000 no par value shares issued) Retained earnings $200,000 324,000 $524, 000 The following are the statements of retained earnings for the two companies for Years 5 and 6: Year 5 $ 548,000 178, 000 (100,000) (120,000) $ 626,000 Pic Year 6 $ 626,000 159,000 Sic Year 5 $ 324,000 146,500 (90,000) $ 380,500 Year 6 $ 380,500 159,500 (90,000) $ 450,000 Retained earnings, beginning of year Profit Dividends Retained earnings, end of year $ 665,000 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.)

On January 1, Year 5, Pic Company acquired 7,500 ordinary shares of Sic Company for $726,000. On January 1, Year 6, Pic Company acquired an additional 2,000 ordinary shares of Sic Company for $260,000. On January 1, Year 5, the shareholders' equity of Sic was as follows: Ordinary shares (10,000 no par value shares issued) Retained earnings $200,000 324,000 $524, 000 The following are the statements of retained earnings for the two companies for Years 5 and 6: Year 5 $ 548,000 178, 000 (100,000) (120,000) $ 626,000 Pic Year 6 $ 626,000 159,000 Sic Year 5 $ 324,000 146,500 (90,000) $ 380,500 Year 6 $ 380,500 159,500 (90,000) $ 450,000 Retained earnings, beginning of year Profit Dividends Retained earnings, end of year $ 665,000 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.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Answer both part of qestion a and b 

On January 1, Year 5, Pic Company acquired 7,500 ordinary shares of Sic Company for $726,000. On January 1, Year 6, Pic Company acquired an additional 2,000 ordinary shares of Sic Company for $260,000. On January 1, Year 5, the shareholders' equity of Sic was as follows: Ordinary shares (10,000 no par value shares issued) Retained earnings $200,000 324,000 $524, 000 The following are the statements of retained earnings for the two companies for Years 5 and 6: Pic Sic Year 5 Year 6 Year 5 Year 6 $ 324,000 146,500 (90,000) $ 380,500 $ 626,000 $ 380,500 159,500 (90,000) $ 450,000 Retained earnings, beginning of year $ 548,000 178,000 (100,000) $ 626,000 Profit 159,000 (120,000) $ 665,000 Dividends Retained earnings, end of year 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.)
Transcribed Image Text:On January 1, Year 5, Pic Company acquired 7,500 ordinary shares of Sic Company for $726,000. On January 1, Year 6, Pic Company acquired an additional 2,000 ordinary shares of Sic Company for $260,000. On January 1, Year 5, the shareholders' equity of Sic was as follows: Ordinary shares (10,000 no par value shares issued) Retained earnings $200,000 324,000 $524, 000 The following are the statements of retained earnings for the two companies for Years 5 and 6: Pic Sic Year 5 Year 6 Year 5 Year 6 $ 324,000 146,500 (90,000) $ 380,500 $ 626,000 $ 380,500 159,500 (90,000) $ 450,000 Retained earnings, beginning of year $ 548,000 178,000 (100,000) $ 626,000 Profit 159,000 (120,000) $ 665,000 Dividends Retained earnings, end of year 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.)
The following are the statements of retained earnings for the two companies for Years 5 and 6: 業業 Pic Sic Year 5 Year 6 Year 5 Year 6 $ 548,000 178,000 (100,000) $ 626,000 $ 626,000 $ 324,000 146,500 (90, ө00) $ 380,500 Retained earnings, beginning of year Profit $ 380,500 159,000 (120,000) $ 665,000 159,500 (90,000) $ 450,000 Dividends Retained earnings, end of year 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.) (i) Customer contracts $ (ii) Non-controlling interest $ (iii) Retained earnings 2$
Transcribed Image Text:The following are the statements of retained earnings for the two companies for Years 5 and 6: 業業 Pic Sic Year 5 Year 6 Year 5 Year 6 $ 548,000 178,000 (100,000) $ 626,000 $ 626,000 $ 324,000 146,500 (90, ө00) $ 380,500 Retained earnings, beginning of year Profit $ 380,500 159,000 (120,000) $ 665,000 159,500 (90,000) $ 450,000 Dividends Retained earnings, end of year 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.) (i) Customer contracts $ (ii) Non-controlling interest $ (iii) Retained earnings 2$
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Filing Federal Income Tax Return
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS