Same question above. But it doesn't show the detailed
Statement of Financial Position, Income Statement, Retaiend Earnings at the acquisition and Fair Value Entrprise Approach.
Victory Co.
Sauce Ltd.
Victory Co. $20,000,000 240,000
Sauce Ltd. $10,000,000
Noncurrent assets: Long-term loan receivable Land Building Accumulated depreciation Machinery Accumulated depreciation Investment in Sauce Ltd. Total noncurrent assets Current assets: Inventories Amounts receivable Cash Total current assets
Sales Dividend income Gain on sale of machine Other income
$
500,000
$ 1,350,000 1,500,000 (600,000) 1,300,000 (000006)
3,000,000 (450,000) 2,000,000 (800,000) 1,500,000 5,750,000
70,000 20,310,000
10,000,000
Cost of sales Other operating expenses Interest expense Total expenses Net income and comprehensive income
10,000,000 8,860,000 20,000 18,880,000 $ 1,430,000
6,000,000 2,800,000 100,000 8,900,000 $1,100,000
2,650,000
1,600,000 600,000 280,000 2,480,000
600,000 300,000 100,000 1,000,000
Total assets
Statements of Comprehensive Income For the year ended December 31, 2020
S
8,230,000
$
3,650,000
Shareholders' equity: Common shares 5 3,700,000 Retained earnings 3,480,000 Total shareholders' equity 7,180,000 Noncurrent liabilities: Long-term loans 650,000 Current liabilities: Accounts payable 400,000 Total liabilities 1,050,000 Total liabilities and shareholders' equity_$ 8,230,000
Victory Co. $ 2,250,000 1,430,000 (000000) $ 3,480,000
Sauce Ltd. $ 650,000 1,100,000 (00000t) $ 1,350,000
1,000,000 1,350,000 2,350,000
Retained earnings, December 31, 20x1 Net income Dividends declared Retained earnings, December 31, 2020
1,000,000
300,000 1,300,000 $ 3,650,000
During 2020 Victory Co. and Sauce Ltd. had the following transactions between them: On June 30 2020, Sauce Ltd. borrowed $500,000 from Victory Co. at an interest rate of 10% (simple interest). Interest is to be paid at the end of each calendar year. Sauce Ltd. did not pay the 2020 interest. During 2020, Sauce Ltd. sold $4,000,000 of goods to Victory Co. At the end of 2020, $1,000,000 of those goods were still in Victory Co.'s ending
other customers.
During 2020, Victory Co. sold $2,000,000 of goods to Sauce Ltd. At the end of 2020, $400,000 of those goods were still in Sauce Ltd.'s ending inventory Victory Co. charged Sauce Ltd. the same price it charges all its other customers.
There was no impairment of goodwill for 2020
The separate-entity statements for Victory Co. and Sauce Ltd. at the end of 2021 are presented below.