Question 1: Consolidated Balance Sheet at Acquisition Date
On January 2, 20X4, Ohya Ltd. Acquired 60% of the voting shares of Ohno Ltd. by issuing shares worth $315,000.
Required:
Prepare the consolidated balance sheet immediately following the acquisition of Ohno Ltd.
Question 2: Consolidated Financial Statements Subsequent to Acquisition
Ohya and Ohno provided the following information for 20X4:
- During 20X4, Ohno solid goods to Ohya for $840,000. As of December 31, 20X4, Ohya still had 25% of the goods in its inventory. Ohya paid the same price for the goods as Ohno's other customers.
- During 20X4, Ohya sold goods to Ohno for $420,000. As of December 31, 20X4, Ohno still had 20% of the goods in its inventory. Ohno paid the same price for the goods as Ohya's other customers.
- Ohno's warehouse and equipment have remaining useful lives of 10 years and 5 years, respectively. Both Ohno and Ohya use straight-line amortization.
- Neither Ohya nor Ohno has disposed of or has written off any property, plant, or equipment.
- There has been no impairment of goodwill.
Required:
Prepare Ohya's consolidated balance sheet, consolidated income statement, and consolidated statement of retained earnings for December 31, 20X4.
Question: Non-Controlling Interests
Ohya and Ohno provided the following information for 20X5.
- All the goods that were in inventory at December 31, 20X4 were sold to third parties by April 20X5.
- During 20X5, Ohno sold goods to Ohya for $336,000. The gross margin is unchanged from 20X4. At December 31, 20X5, Ohya still had 50% of the goods in its inventory.
- At the beginning of December, Ohya sold goods to Ohno for $84,000. Ohya's gross margin on this sale was 50%. By the end of the year, Ohno had not sold any of these goods.
Required:
Calculate the following amounts for the year ended December 31, 20X5:
a. non-controlling interest in earnings that would appear on Ohya's consolidated income statement
b. non-controlling interest that would appear on Ohya's consolidated balance sheet