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The financial statements of Company Permanent and its subsidiary Company Senior are shown below. Statement of Financial Position As at 31 December 2020 Permanent Senior Investment in Senior 759,000 Other net assets 4,354,400 1,000,000 5,113,400 1,000,000 2,305,000 2,082,000 Share capital 310,000 Retained earnings Liability 540,055 726,400 149,945 5.113,400 1,000,000 Income Statement and Partial Statement of Changes in Equity For the Year Ended 31 December 2020 Permanent Senior Sales Cost of sales 1,000,000 647,000 (900,000) (313,945) Dividend income from Senior 240,000 340,000 (202,000) 138,000 2,050,000 (106,000). 2,082,000 Profit before tax Тах 333,055 _(3,000) 330,055 Profit after tax Retained earnings, 1 January 2020 Dividends declared Retained earnings, 31 December 2020 510,000 (300,000) 540,055 A) Permanent acquired 80% of interest in Senior on 1 January 2018 when the shareholders' equity of Senior was as follows: Share capital Retained earnings $310,000 $140,000 Fair value of identifiable net assets of Senior was close to the book value. B) Non-controlling interest is calculated on a fair value basis, and it was $121,000 on 1 January 2018. C) Goodwill impairment was $70,000 in 2018 and S60,000 in 2020. D) Intercompany sales from Senior to Permanent during 2020 was $100,000. Cost to Senior was $90,000. All the purchase was still kept by Permanent as at 31 December 2020.

The financial statements of Company Permanent and its subsidiary Company Senior are shown below. Statement of Financial Position As at 31 December 2020 Permanent Senior Investment in Senior 759,000 Other net assets 4,354,400 1,000,000 5,113,400 1,000,000 2,305,000 2,082,000 Share capital 310,000 Retained earnings Liability 540,055 726,400 149,945 5.113,400 1,000,000 Income Statement and Partial Statement of Changes in Equity For the Year Ended 31 December 2020 Permanent Senior Sales Cost of sales 1,000,000 647,000 (900,000) (313,945) Dividend income from Senior 240,000 340,000 (202,000) 138,000 2,050,000 (106,000). 2,082,000 Profit before tax Тах 333,055 _(3,000) 330,055 Profit after tax Retained earnings, 1 January 2020 Dividends declared Retained earnings, 31 December 2020 510,000 (300,000) 540,055 A) Permanent acquired 80% of interest in Senior on 1 January 2018 when the shareholders' equity of Senior was as follows: Share capital Retained earnings $310,000 $140,000 Fair value of identifiable net assets of Senior was close to the book value. B) Non-controlling interest is calculated on a fair value basis, and it was $121,000 on 1 January 2018. C) Goodwill impairment was $70,000 in 2018 and S60,000 in 2020. D) Intercompany sales from Senior to Permanent during 2020 was $100,000. Cost to Senior was $90,000. All the purchase was still kept by Permanent as at 31 December 2020.

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter3: Financial Statements, Cash Flow, And Taxes
Section: Chapter Questions
Problem 19SP
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Prepare the consolidation adjustment and elimination entries for the year ended 31 December 2020. Show all relevant workings. Worksheets are not required.

The financial statements of Company Permanent and its subsidiary Company Senior are shown below. Statement of Financial Position As at 31 December 2020 Permanent 24 Senior Investment in Senior 759,000 Other net assets 4,354,400 1,000,000 5,113,400 1,000,000 2,305,000 Share capital Retained earnings 310,000 540,055 149,945 2,082,000 Liability 726,400 5,113,400 1,000,000 Income Statement and Partial Statement of Changes in Equity For the Year Ended 31 December 2020 Permanent Senior 2$ Sales 1,000,000 (900,000) 240,000 340,000 647.000 Cost of sales (313,945) Dividend income from Senior Profit before tax 333,055 Тах (202,000) 138,000 (3,000) 330,055 Profit after tax Retained earnings, 1 January 2020 2,050,000 510,000 (300,000) 540,055 Dividends declared (106,000) Retained earnings, 31 December 2020 2,082,000 (A) Permanent acquired 80% of interest in Senior on 1 January 2018 when the shareholders' equity of Senior was as follows: Share capital Retained earnings $310,000 $140,000 Fair value of identifiable net assets of Senior was close to the book value. (B) Non-controlling interest is calculated on a fair value basis, and it was $121,000 on 1 January 2018. (C) Goodwill impairment was $70,000 in 2018 and $60,000 in 2020. (D) Intercompany sales from Senior to Permanent during 2020 was $100,000. Cost to Senior was $90,000. All the purchase was still kept by Permanent as at 31 December 2020.
Transcribed Image Text:The financial statements of Company Permanent and its subsidiary Company Senior are shown below. Statement of Financial Position As at 31 December 2020 Permanent 24 Senior Investment in Senior 759,000 Other net assets 4,354,400 1,000,000 5,113,400 1,000,000 2,305,000 Share capital Retained earnings 310,000 540,055 149,945 2,082,000 Liability 726,400 5,113,400 1,000,000 Income Statement and Partial Statement of Changes in Equity For the Year Ended 31 December 2020 Permanent Senior 2$ Sales 1,000,000 (900,000) 240,000 340,000 647.000 Cost of sales (313,945) Dividend income from Senior Profit before tax 333,055 Тах (202,000) 138,000 (3,000) 330,055 Profit after tax Retained earnings, 1 January 2020 2,050,000 510,000 (300,000) 540,055 Dividends declared (106,000) Retained earnings, 31 December 2020 2,082,000 (A) Permanent acquired 80% of interest in Senior on 1 January 2018 when the shareholders' equity of Senior was as follows: Share capital Retained earnings $310,000 $140,000 Fair value of identifiable net assets of Senior was close to the book value. (B) Non-controlling interest is calculated on a fair value basis, and it was $121,000 on 1 January 2018. (C) Goodwill impairment was $70,000 in 2018 and $60,000 in 2020. (D) Intercompany sales from Senior to Permanent during 2020 was $100,000. Cost to Senior was $90,000. All the purchase was still kept by Permanent as at 31 December 2020.
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