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.)
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 1BCRQ
Related questions
Question
Answer both part of qestion a and b
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.)
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
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
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
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College