Question

On January 1, Year 5, Pic Company acquired 7,500 ordinary shares of Sic Company for $699,000. On January 1, Year 6, Pic Company acquired an additional 2,000 ordinary shares of Sic Company for $211,000. On January 1, Year 5, the shareholders’ equity of Sic was as follows:

 

Ordinary shares (10,000 no par value shares issued)	$	200,000
Retained earnings		336,000
	$	536,000

 

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
Retained earnings, beginning of year	$	572,000		$	646,500			$	336,000		$	374,500
Profit		174,500			145,500				128,500			145,000
Dividends		(100,000	)		(120,000	)			(90,000	)		(90,000	)
Retained earnings, end of year	$	646,500		$	672,000			$	374,500		$	429,500

 

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	$