on january 2 year 1 road ltd acquired 70 of the outstanding voting shares of runner ltd the acquisition differential of 280000/

Need your ASSIGNMENT done? Use our paper writing service to score better and meet your deadlines.

Order a Similar Paper Order a Different Paper

Additional Information
• Runner regularly sells raw materials to Road. Intercompany sales in Year 5 totaled $420,000.
• Intercompany profits in the inventories of Road were as follows:
January 1, Year 5………… $75,000
December 31, Year 5………… 40,000
• Road’s entire rental expense relates to equipment rented from Runner.
• A goodwill impairment loss of $3,000 occurred in Year 5.
• Retained earnings at December 31, Year 5, for Road and Runner were $2,525,700 and $1,150,000, respectively.
• Road uses the equity method to account for its investment, and uses income tax allocation at the rate of 40% when it prepares consolidated statements.
(a) Prepare a consolidated income statement for Year 5 with expenses classified by nature.
(b) Calculate consolidated retained earnings at December 31, Year 5.
(c) If Road had used parent company extension theory rather than entity theory, how would this affect the return on equity attributable to shareholders of Road for Year 5?

"Is this question part of your assignment? We can help"


Do you need help with this or a different assignment? We offer CONFIDENTIAL, ORIGINAL (Turnitin/LopesWrite/SafeAssign checks), and PRIVATE services using latest (within 5 years) peer-reviewed articles. Kindly click on ORDER NOW to receive an A++ paper from our masters- and PhD writers.

Get a 15% discount on your order using the following coupon code SAVE15

Order a Similar Paper Order a Different Paper