Question

Large Ltd. purchased 70% of Small Company on January 1, Year 6, for $630,000, when the statement of financial position for Small showed common shares of $440,000 and retained earnings of $140,000. On that date, the inventory of Small was undervalued by $44,000, and a patent with an estimated remaining life of five years was overvalued by $66,000.

 

Small reported the following subsequent to January 1, Year 6:

 

	Profit (Loss)			Dividends
Year 6	$	96,000		$	29,000
Year 7		(39,000	)		14,000
Year 8		94,000			44,000

 

A test for goodwill impairment on December 31, Year 8, indicated a loss of $19,700 should be reported for Year 8 on the consolidated income statement. Large uses the cost method to account for its investment in Small and reported the following for Year 8 for its separate-entity statement of changes in equity:

 

Retained earnings, beginning	$	540,000
Profit		240,000
Dividends		(66,000	)
Retained earnings, end	$	714,000

Compute the following on the consolidated financial statements for the year ended December 31, Year 8: 

 

(i) Goodwill

 

Goodwill           $ 

 

(ii) Non-controlling interest on the statement of financial position

 

Non-controlling interest           $ 

 

(iii) Retained earnings, beginning of year

 

Retained earnings, beginning of year           $ 

 

(iv) Profit attributable to Large’s shareholders

 

Profit attributable to Large’s shareholders           $ 

 

(v) Profit attributable to non-controlling interest

 

Profit attributable to non-controlling interest           $