Deck 5: Consolidation of Non-Wholly Owned Subsidiaries

Question

Olthius Ltd.purchased 60% of Fredo Ltd.for $1,500,000.At the date of acquisition,the carrying value of Fredo's net identifiable assets was $1,800,000 and the fair value was $2,200,000.What is the amount of the goodwill under the entity method?

A)$(300,000)
B)$120,000
C)$300,000
D)$400,000

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Question

Taguchi Ltd.owns 80% of Shag Co.Shag declared and paid $100,000 in dividends.Taguchi uses the cost method to record its investment in Shag.In preparing Taguchi's consolidated financial statements,what elimination entry must be made with respect to the dividends?

<strong>Taguchi Ltd.owns 80% of Shag Co.Shag declared and paid $100,000 in dividends.Taguchi uses the cost method to record its investment in Shag.In preparing Taguchi's consolidated financial statements,what elimination entry must be made with respect to the dividends?</strong> A) B) C) D) <div style=padding-top: 35px>

Question

Assume that a parent company has 4 subsidiaries.Under IFRS 3,which of the following statements is true?

A)All 4 subsidiaries must be reported using the parent-company extension method.
B)All 4 subsidiaries must be reported using the entity method.
C)Each subsidiary must be reported using either the parent-company extension method or the entity method.Consistency is not required.
D)All 4 subsidiaries must be reported using either the parent-company extension method or the entity method.Consistency is required.

Question

Portia Ltd.acquired 80% of Siro Ltd.on December 31,20X0.At the date of acquisition,Siro's net assets totalled $15,000.Portia uses the cost method to record the acquisition.At December 31,20X1,the separate-entity financial statements showed the following:

During 20X1,Siro sold $7,000 of goods,with a gross margin of 40%,to Portia.At the end of 20X1,$3,000 of the goods were still in Portia's inventory.What portion of consolidated net income for 20X1 is attributable to Portia?

A)$6,120
B)$6,240
C)$6,600
D)$7,080

Question

Lopez Ltd.purchases 65% of Wheatfall Co.Under the entity method of consolidation,what is allocated to non-controlling interest?

A)35% of Wheatfall's net assets at fair value
B)35% of Wheatfall's net assets at carrying value
C)35% of Wheatfall's net assets at carrying value plus 35% of Wheatfall's fair value increments excluding goodwill
D)35% of Wheatfall's net assets at carrying value plus 35% of Wheatfall's fair value increments including goodwill

Question

How is the consolidated ending retained earnings balance calculated?

A)Add the beginning consolidated retained earnings to consolidated net income and subtract the parent company's dividends declared.
B)Add together the ending retained earnings of all the affiliated companies.
C)Adjust the parent company's opening retained earnings for the subsidiary's profits and dividends
D)Adjust the parent company's ending retained earnings for the subsidiary's profits and dividends

Question

Which of the following statements about IFRS 3,Business Combinations is true?

A)IFRS 3 allows organizations to use either the parent-company method or the entity method.
B)IFRS 3 allows organizations to use either the parent-company extension method or the entity method.
C)IFRS 3 allows organizations to use either the parent-company method or the parent-company extension method.
D)IFRS 3 allows organizations to use either the parent-company method,the parent-company extension method,or the entity method.

Question

Bates Ltd.owns 60% of the outstanding common shares of Sam Ltd.During 20X6,sales from Sam to Bates were $200,000.Merchandise was priced to provide Sam with a gross margin of 20%.Bates' inventories contained $40,000 at December 31,20X5 and $15,000 at December 31,20X6 of merchandise purchased from Sam.Cost of goods sold for Bates and Sam for 20X6 on their separate-entity income statements were as follows:

What is the balance of the inventory account on Bates' consolidated statement of financial position at December 31,20X6?

A)$140,000
B)$160,000
C)$162,000
D)$165,000

Question

Amber Ltd.purchased 80% of Patel Ltd.for $1,000,000.At the time of acquisition,the carrying value of Patel's net identifiable assets was $1,000,000 and the fair value was $1,350,000.What is the amount of the goodwill under the entity method?

A)$(100,000)
B)$100,000
C)$280,000
D)$350,000

Question

In preparing consolidation working papers,why is it necessary to eliminate intercompany profits?

A)To nullify the effect of intercompany transactions on consolidated financial statements
B)To defer intercompany profits until the following year
C)To allocate unrealized profits until the following year
D)To reduce consolidated income

Question

Arnez Ltd.acquired 70% of Bedard Ltd.At the acquisition date,Bedard's net identifiable assets had a carrying value of $825,000 and a fair value of $1,000,000.Arnez paid $910,000 for the acquisition.Under the parent-company extension method,what amount should be reported for goodwill on Arnez's consolidated statement of financial position?

A)$210,000
B)$300,000
C)$332,500
D)$475,000

Question

Which consolidation method includes only the parent's share of a subsidiary's goodwill?

A)Proportionate consolidation
B)Parent-company method
C)Parent-company extension method
D)Entity method

Question

Fleming Ltd.acquired 75% of Donner Ltd.at April 30,20X1.Both companies have April 30^th year-ends.Which of the following should be made to the opening non-controlling interest (NCI)balance to arrive at the April 30,20X2 NCI balance on Fleming's statement of financial position?

A)Add in the NCI's share of Donner's fiscal 20X2 net income and subtract the NCI's share of Donner's dividends declared.
B)Subtract the NCI's share of Donner's fiscal 20X2 net income and add in the NCI's share of Donner's dividends declared.
C)Add in both the NCI's share of Donner's fiscal 20X2 net income and dividends declared.
D)Subtract both the NCI's share of Donner's fiscal 20X2 net income and dividends declared.

Question

On December 31,20X2,Bates Ltd.purchased 75% of the outstanding common shares of Ted Ltd.for $1,050,000 in cash.The balance sheets of Bates and Ted immediately before the acquisition were as follows (in 000s):

At the time of acquisition,Ted's capital assets still had a remaining useful life
Of ten years.What is the amount of the adjustment to the net book value of capital assets on the consolidated statement of financial position at December 31,20X2 under the parent-company approach?

A)$ 94,500
B)$135,000
C)$157,000
D)$225,000

Question

Which consolidation method does not include incorporating 100% of a subsidiary's revenues and expenses?

A)Proportionate consolidation
B)Parent-company method
C)Parent-company extension method
D)Entity method

Question

Under IAS 27,where does the non-controlling interest (NCI)appear on the statement of financial position?

A)Under the liabilities section
B)Under the shareholders' equity section
C)Between the liabilities and shareholders' equity sections
D)NCI does not appear on the statement of financial position

Question

Portia Ltd.acquired 80% of Siro Ltd.on December 31,20X0.At the acquisition date,Siro's net assets totalled $15,000.Portia uses the cost method to record the acquisition.At December 31,20X1,the separate-entity financial statements showed the following:

During 20X1,Siro sold $7,000 of goods,with a gross margin of 40%,to Portia.At the end of 20X1,$3,000 of the goods were still in Portia's inventory.What is Portia's consolidated cost of goods sold for 20X1?

A)$11,800
B)$14,200
C)$14,800
D)$20,000

Question

Sunny Co.purchased 80% of Reuben Ltd.for $1,200,000.At the date of acquisition,the carrying value of Reuben's net identifiable assets was $1,000,000,and the fair value was $1,300,000.What is the amount of the goodwill under the entity method?

A)$0
B)$200,000
C)$240,000
D)$300,000

Question

What is the purpose of showing an allocation of the net income between the parent and the subsidiary companies on the consolidated statement of comprehensive income?

A)To report the net income of the parent company to its shareholders
B)To report the net income of the subsidiary company to its shareholders
C)To report the net income of the parent and subsidiary companies to their respective shareholders
D)To report the net income of the parent and subsidiary companies to the tax department

Question

Portia Ltd.acquired 80% of Siro Ltd.on December 31,20X0.At the acquisition date,Siro's net assets totalled $15,000.Portia uses the cost method to record the acquisition.At December 31,20X1,the separate-entity financial statements showed the following:

During 20X1,Siro sold $7,000 of goods,with a gross margin of 40%,to Portia.At the end of 20X1,$3,000 of the goods were still in Portia's inventory.What amount should be shown on the consolidated statement of financial position for the non-controlling interest at December 31,20X1?

A)$ 720
B)$1,720
C)$3,480
D)$3,720

Question

On September 1,20X5,High Limited decided to buy 70% of the shares outstanding of Low Inc.for $630,000.High will pay for this acquisition by using cash of $500,000 and issuing share capital for the remaining amount.The balances showing on the statement of financial position for the two companies at August 31,20X5 are as follows:

After a review of the financial assets and liabilities,High determines that some of the assets of Low have fair values different from their carrying values.These items are listed below:
• Land has a fair value of 225,000
• The building has a fair value of 1,090,000.The remaining useful life of the building is 20 years.
• Patent is $100,000.The patent is estimated to have a useful life of 5 years.
During the 20X7 fiscal year,the following events occurred:
1.On March 1,20X7,Low sold land to High for $390,000,which had a carrying value of $275,000.High paid for this with $90,000 cash and a note payable for the difference.This note pays interest at 10% which is paid monthly.
2.High sold supplies (included in High sales)to Low for $200,000.Profit margin on these sales is 25%.Low still has supplies on hand of $70,000.
3.In 20X6,Low had provided seat space on flights to High for a value of $500,000.This amount was included in sales for Low.Profit margin on these sales is 40%.At the end of August,20X6,High still had an amount of $200,000 in these prepaid seats that had not yet been used.(High includes this in inventory. )
Statements of Financial Position
As at August 31,20X7

Statements of Comprehensive Income
For the year ended August 31,20X7

Required:
Calculate the balances for the following consolidated balances of High at August 31,20X7 assuming High uses the entity approach:
a.Goodwill
b.Non-controlling interest
c.Buildings and Equipment,net

Question

Bates Ltd.owns 60% of the outstanding common shares of Sam Ltd.During 20X6,sales from Sam to Bates were $200,000.Merchandise was priced to provide Sam with a gross margin of 20%.Bates' inventories contained $40,000 at December 31,20X5 and $15,000 at December 31,20X6 of merchandise purchased from Sam.Cost of goods sold for Bates and Sam for 20X6 on their separate-entity income statements were as follows:

What is the non-controlling interest's share of the consolidation adjustments on the income statement for the year ended December 31,20X6?

A)$2,000
B)$3,000
C)$5,000
D)$1,250

Question

Statements of Comprehensive Income
For the year ended August 31,20X7

Required:
Calculate the balances for the following consolidated balances of High at August 31,20X7 assuming High uses the parent-company extension method approach:
a.Goodwill
b.Retained Earnings
c.Patent,net

Question

Bates Ltd.owns 60% of the outstanding common shares of Sam Ltd.During 20X6,sales from Sam to Bates were $200,000.Merchandise was priced to provide Sam with a gross margin of 20%.Bates' inventories contained $40,000 at December 31,20X5 and $15,000 at December 31,20X6 of merchandise purchased from Sam.Cost of goods sold for Bates and Sam for 20X6 on their separate-entity income statements were as follows:

What is cost of goods sold on the consolidated income statement for 20X6?

A)$687,000
B)$680,000
C)$685,600
D)$660,000

Question

Under the parent-company extension method,to which company should the impairment of goodwill be attributed?

A)Solely to the parent company
B)Solely to the subsidiary company
C)Allocated between the parent and subsidiary companies
D)No attribution as goodwill is not shown under this method

Question

On December 31,20X5,Paper Co.purchased 60% of the outstanding common shares of Book Ltd.for $760,000 in shares and $200,000 in cash.The statements of financial position of Paper and Book immediately before the acquisition and issuance of the notes payable were as follows (in 000s):

s) Statements of Comprehensive Income For the year ended December 31,20X7 (in thousands of
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e1e_8673_17bfb9e70ca1_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e1f_8673_3fd87744d883_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e20_8673_0766af66919c_TB1557_00
Required:
Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7.
Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

s) Statements of Changes in Equity - Retained Earnings Section For the year ended December 31,20X7 (in thousands of
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e1e_8673_17bfb9e70ca1_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e1f_8673_3fd87744d883_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e20_8673_0766af66919c_TB1557_00
Required:
Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7.
Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

s) Required: Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7. Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

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The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e1e_8673_17bfb9e70ca1_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e1f_8673_3fd87744d883_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e20_8673_0766af66919c_TB1557_00
Required:
Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7.
Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

s) Statements of Comprehensive Income For the year ended December 31,20X7 (in thousands of
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e1f_8673_3fd87744d883_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e20_8673_0766af66919c_TB1557_00
Required:
Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7.
Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

s) Statements of Changes in Equity - Retained Earnings Section For the year ended December 31,20X7 (in thousands of
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e1f_8673_3fd87744d883_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e20_8673_0766af66919c_TB1557_00
Required:
Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7.
Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

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Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e1f_8673_3fd87744d883_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e20_8673_0766af66919c_TB1557_00
Required:
Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7.
Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

s) Statements of Comprehensive Income For the year ended December 31,20X7 (in thousands of
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e20_8673_0766af66919c_TB1557_00
Required:
Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7.
Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

s) Statements of Changes in Equity - Retained Earnings Section For the year ended December 31,20X7 (in thousands of
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e20_8673_0766af66919c_TB1557_00
Required:
Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7.
Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

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Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1099_7e20_8673_0766af66919c_TB1557_00
Required:
Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7.
Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

s) Statements of Comprehensive Income For the year ended December 31,20X7 (in thousands of
Required:
Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7.
Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

s) Statements of Changes in Equity - Retained Earnings Section For the year ended December 31,20X7 (in thousands of
Required:
Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7.
Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

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Required:
Paper has determined that it does not have control but only has significant influence over Book.Calculate the balance in the investment account at December 31,20X7.
Calculate the investment income from this investee for 20X7 that Paper would show on its statement of comprehensive income.

Question

On December 31,20X6,the balance sheets of the Power Company and the Pro Company are as follows (amounts in thousands):

Power Company has 100,000 shares of common stock outstanding: Pro Company has 45,000 shares outstanding.All assets and liabilities have book value equal to fair values,except as noted.
The plant and equipment has an estimated remaining useful life of nine years from the date of acquisition.The long term liabilities mature on December 31,2010.Market value of the new shares issued was $90 per share at issuance.
Required:
Assume that 80% of the outstanding shares of Pro were acquired for cash of $5.8 million.Calculate goodwill and the non-controlling interest on the consolidated balance sheet at December 31,20X6 under the entity method and the parent-company extension method.
At December 31,20X9,the balance in the long term liabilities of Pro is still $500,000 and the balance of log term liabilities for Power is $900,000.Calculate the balance in the consolidated Long-term liabilities balance as at December 21,20X9.

Question

On December 31,20X2,the Esther Company purchased 80% of the outstanding common shares of the Jane Company for $7.5 million in cash.On that date,the shareholders' equity of Jane totalled $6 million and consisted of $1 million in no par common shares and $5 million in retained earnings.Both companies use the straight-line method to calculate depreciation and amortization.Goodwill,if any arises as a result of this business combination,is written down if there is a permanent impairment in its value.
For the year ending December 31,20X4,the statements of comprehensive income for Esther and Jane were as follows:

At December 31,20X4,the condensed statements of financial position for the two companies were as follows:

OTHER INFORMATION:
1.On December 31,20X2,Jane had a building with a fair value that was $450,000 greater than its carrying value.The building had an estimated remaining useful life of 15 years.
2.On December 31,20X2,Jane had inventory with a fair value that was $150,000 less than its carrying value.This inventory was sold in 20X3.
3.During 20X3,Jane sold merchandise to Esther for $100,000,a price that included a gross profit of $50,000.During 20X3,40% of this merchandise was resold by Esther and the other 60% remained in its December 31,20X3 inventories.On December 31,20X4,the inventories of Esther contained merchandise purchased from Jane on which Jane had recognized a gross profit in the amount of $20,000.Total sales from Jane to Esther were $150,000 during 20X4.
4.During 20X4,Esther declared and paid dividends of $300,000 while Jane declared and paid dividends of $100,000.
5.Esther accounts for its investment in Jane using the cost method.
Required:
Calculate the retained earnings balance on the consolidated statement of financial position as at December 31,20X4 under the entity method.

Question

At December 31,20X4,the condensed statements of financial position for the two companies were as follows:

OTHER INFORMATION:
1.On December 31,20X2,Jane had a building with a fair value that was $450,000 greater than its carrying value.The building had an estimated remaining useful life of 15 years.
2.On December 31,20X2,Jane had inventory with a fair value that was $150,000 less than its carrying value.This inventory was sold in 20X3.
3.During 20X3,Jane sold merchandise to Esther for $100,000,a price that included a gross profit of $50,000.During 20X3,40% of this merchandise was resold by Esther and the other 60% remained in its December 31,20X3 inventories.On December 31,20X4,the inventories of Esther contained merchandise purchased from Jane on which Jane had recognized a gross profit in the amount of $20,000.Total sales from Jane to Esther were $150,000 during 20X4.
4.During 20X4,Esther declared and paid dividends of $300,000 while Jane declared and paid dividends of $100,000.
5.Esther accounts for its investment in Jane using the cost method.
Required:
Calculate the non-controlling interest on the consolidated statement of financial position as at December 31,20X4 under the entity method.

Question

s) Statements of Comprehensive Income For the year ended December 31,20X7 (in thousands of
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
5.Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d055_8673_1dfe378b5f0b_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

s) Statements of Changes in Equity - Retained Earnings Section For the year ended December 31,20X7 (in thousands of
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
5.Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d055_8673_1dfe378b5f0b_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

s) Required: Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method: a.Goodwill b.Non-controlling interest c.Capital assets,net

" class="answers-bank-image d-block" loading="lazy" >
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
5.Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d055_8673_1dfe378b5f0b_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

s) Statements of Comprehensive Income For the year ended December 31,20X7 (in thousands of
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

s) Statements of Comprehensive Income For the year ended December 31,20X7 (in thousands of
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
5.Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d055_8673_1dfe378b5f0b_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

s) Statements of Changes in Equity - Retained Earnings Section For the year ended December 31,20X7 (in thousands of
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
5.Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d055_8673_1dfe378b5f0b_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

" class="answers-bank-image d-block" loading="lazy" >
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
5.Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d055_8673_1dfe378b5f0b_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

s) Statements of Changes in Equity - Retained Earnings Section For the year ended December 31,20X7 (in thousands of
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

s) Statements of Comprehensive Income For the year ended December 31,20X7 (in thousands of
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
5.Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d055_8673_1dfe378b5f0b_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

s) Statements of Changes in Equity - Retained Earnings Section For the year ended December 31,20X7 (in thousands of
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
5.Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d055_8673_1dfe378b5f0b_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

" class="answers-bank-image d-block" loading="lazy" >
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
5.Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d055_8673_1dfe378b5f0b_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

" class="answers-bank-image d-block" loading="lazy" >
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

s) Statements of Comprehensive Income For the year ended December 31,20X7 (in thousands of
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
5.Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d055_8673_1dfe378b5f0b_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

s) Statements of Changes in Equity - Retained Earnings Section For the year ended December 31,20X7 (in thousands of
The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
5.Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d055_8673_1dfe378b5f0b_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

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The difference in the carrying value and the fair value of the capital assets for Book relates to its office building.This building has an estimated 20 years remaining of useful life.
During 20X6,the year following the acquisition,the following occurred:
1.Throughout the year,Book purchased merchandise of $800,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $250,000 on this merchandise.75% of this merchandise was resold by Book prior to December 31,20X6.
2.Throughout the year,Book sold merchandise to Paper totalling $500,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 60% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X6 and Paper paid dividends of $500,000.
During 20X7,the following occurred:
1.Throughout the year,Book purchased merchandise of $1,000,000 from Paper.Paper's gross margin is 30% of selling price.At December 31,20X6,Book still owed Paper $150,000 on this merchandise.85% of this merchandise was resold by Book prior to December 31,20X7.
2.Throughout the year,Book sold merchandise to Paper totalling $650,000.The gross margin in these products is 25%.At the end of 20X6,Paper had not yet resold 40% of this merchandise.
3.Management fees were paid to Paper from Book totalling $250,000.
4.Book paid dividends of $250,000 at the end of 20X7 and Paper paid dividends of $500,000.
5.Paper uses the cost method to report its investment in Book.
Statements of Financial Position
As at December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d055_8673_1dfe378b5f0b_TB1557_00
Statements of Comprehensive Income
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_d056_8673_f38479e292e5_TB1557_00
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net

s) Statements of Comprehensive Income For the year ended December 31,20X7 (in thousands of
Statements of Changes in Equity - Retained Earnings Section
For the year ended December 31,20X7
(in thousands of $'s)
11ea7fc9_1097_f767_8673_0b473c8c4909_TB1557_00
Required:
Calculate the following items as they would appear on the Paper Co.'s consolidated statement of financial position at December 31,20X7 under the entity method:
a.Goodwill
b.Non-controlling interest
c.Capital assets,net