Balance Sheet and Sylvan Essay

On January 1 2007, tower purchased 60% of the common sh atomic number 18s of sylvan for $4,500. On that date, artless had common sh atomic number 18s of $1,250 and retained earnwork of $3,000. Fair values were equal to carrying values for every last(predicate) hoidenishs net assets except inventory, capital assets and notes payable. The fair value of inventory was $60 to a greater extent than take value, the book value of capital assets was $ hundred greater than fair value and the stigmatises payable had a fair value of $150 less than book value. acquit that each shares of verdant have the said(prenominal) value and no control premium was paying(a) at the date of eruditeness. The unite Financial statements leave alone be fastend using IFRS Entity Method.The financial statements for Pillar and Sylvan for the year ended celestial latitude 31, 2010 were as follows eternal sleep Sheetscelestial latitude 31, 2010$000sPILLAR silvanCash$680$435Accounts receivable1,7551,02 5Inventory2,8491,790Capital assetsnet3,9763,000 investment in Sylvan4,500 thorough assets$13,760$6,250 received liabilities$400$255Notes payable5,8001,185Common shares2,0001,250 carry requital5,5603,560Total$13,760$6,250Statements of Income and Retained feeYear cease December 31, 2010PILLARSYLVANSales and all other Income$4,040$2,710Cost of sales1,6001,1402,4401,570Amortization(480)(310) different expenses and losses including taxes(500)(210) web income1,4601,050Additional information add up in $000s1. Capital assets are to be amortized over an average remaining substance abuseful vivification of 8 years at January 1, 2007 and the notes payable hop on on December 31, 2011. Goodwill impairment losses for 2008 and 2010 were $240 and $300 respectively. Straight line amortization is unobjectionable for all acquisition differentials.2. At December 31, 2010, Sylvans inventory included goods purchased from Pillar for $760. Total purchases from Pillar in 2010 were $1000 all priced at mark-ups averaging 25% of Pillars cost.3. On December 31, 2009, the inventories of Pillar contained $500 of swop purchased from Sylvan. Sylvan earns a gross margin of 30% on all sales to Pillar. During December 2010, Pillar purchased merchandise from Sylvan for $900 and did not pay for$250 of the purchases by December 31, 2010. 40% of the inventory was resold by Pillar to begin with the year end.4. On July 1, 2010, Sylvan sold a new tract of Land to Pillar for $170. On December 1, 2009, Sylvan had bought the province for $200. The fair trade value of the land at July 1, 2010 was $220.5. On kinfolk 30, 2008, Pillar sold Land to Sylvan for $100. The land had a book value of $60 on the date of the sale.6. On December 1, 2010, Pillar and Sylvan declared and paid dividends of $150 and $100 respectively.7. twain companies pay taxes at the rate of 40%. Assume all intercomp any Transactions are taxed at 40%REQUIRED Please use a parking lot BOOKLET1. Prepare a Consolidated Balance Sheet at December 31, 2010. (22 Marks) 2. Prepare an separate calculation of ENDING Consolidated Retained Earnings at December 31, 2010. (11 marks) 3. Assume Pillar wishes to use the law order in their General Ledger, organise Investment income from Sylvan for the year ending December 31, 2010 (10 Marks)NOTEThis question will help you prepare for the technical question on the midterm. Do much than the question asks so that you are prepared for any possible questions you may be asked Eg. Prepare a Consolidated Income statement and an independent calculation of Consolidated Net Income attributable to Parent company shareholders betoken the Investment Income under the equity method Note the only difference between the equity method used when significant Influence is present and the equity method used in the general al-Quran of the parent when control is present is the treatment of downriver transactions. According to IAS 28.28 all unrealized intercompany profits are eliminated proportionately between investor and investee. Therefore if investor owns 30% of investee, 30% of all unrealized profits/losses are removed. When control exists the parent eliminates upstream proportionately with NCI and downstream unrealized profits are eliminated 100% from parent. survey figuresAt December 31, 2010Goodwill at acquisition ($3,140)$2,600Consolidated total Assets$17,615.6Capital assets$6916Consolidated Retained Earnings$5331.28NCI Balance Sheet$2924.32Consolidated Net Income Entity$2052.1Attributable to Parent shareholders1754.78Attributable to NCI$297.32Investment trace Balance sheet equity method$4,271.28Investment income equity method 2010$354.78(removing 100% downstream)