the following financial statements were prepared on december 31 year 6 additional 4375476

The following financial statements were prepared on December 31, Year 6. Additional Information Pearl purchased 75% of the outstanding voting shares of Silver for $2,400,000 on July 1, Year 2, at which time Silver’s retained earnings were $400,000, and accumulated depreciation was $60,000. The acquisition differential on this date was allocated as follows: • 30% to undervalued inventory • 40% to equipment-remaining useful life 8 years • Balance to goodwill During Year 3, a goodwill impairment loss of $70,000 was recognized, and an impairment test conducted as at December 31, Year 6, indicated that a further loss of $20,000 had occurred. Amortization expense is grouped with cost of goods sold and impairment losses are grouped with administrative expenses. Silver owes Pearl $75,000 on December 31, Year 6. Required: (a) Prepare consolidated financial statements on December 31, Year 6. (b) Calculate goodwill impairment loss and non-controlling interest on the consolidated income statement for the year ended December 31, Year 6, under parent company extension theory. (c) Calculate goodwill and non-controlling interest on the consolidated balance sheet at December 31, Year 6, under parent company extension theory. View Solution:
The following financial statements were prepared on December 31 Year

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