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Unformatted text preview: E5-1E5-2E5-9 -Beginning retained earnings1.dbdAdd income to controlling interest (2.dcc Less parent company's dividends3.ba b Ending retained earnings4.dc d5.c dParent's net income6.dEliminate equity in sub's income7.c Subsidiary's net incomeConsolidated net incomeConsolidated net incomeIncome to noncontrolling interestIncome to controlling interest - Fair value at time of acquisitionCostFair value of noncontrolling interesTotalIdentifiable assetsBook valueAppreciation of plant assetsTotalGoodwill -Beginning noncontrolling interestNoncontrolling share of sub. incomNoncontrolling share of additionaldepreciation expenseNoncontrolling share of dividendsEnding noncontrolling interestE5-4a., b., and c. are at fair values. $140,000, $60,000, and $550,000, respectively.e. $0. The consolidated entity should not show the investment in the sub.d./e.Fair value at time of acquisitionCost470,000 Fair value of noncontrolling interest117,500 Total587,500 x 20% =117,500 (f.)Identifiable assetsBook value450,000 Increase in value of inventory20,000 Decrease in value of land(10,000)Increase in value of PP&E70,000 Total530,000 Goodwill57,500 (d.)E5-7Common stock120,000 [from Dynamic balanRetained earnings240,000 [from Dynamic balanDifferential160,000 [plug]Investment in Dynamic390,000 [cost of investment; gNoncontrolling interest130,000 [fair value; given]Goodwill44,000 [plug]Buildings80,000 [increase in value; giInventory36,000 [increase in value; giDifferential160,000 [from above]E5-10a.Investment in Farmstead210,000 Cash210,000 Cash3,500 Investment in Farmstead3,500 Investment in Farmstead14,000 Investment income - Farmstead14,000 b.Investment income - Farmstead...
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