Determine balance sheet, Financial Accounting

Determine balance sheet:

Income Statements

Year Ended December 31, 20X8


Insure Co.

Go-med Co.




Other income



Gain on sale of land






Cost of sales



Operating expenses



Income tax






    Net income




Insure acquired 40% of the common shares of Go-med in 20X2 for $1,072,500. 

For 20X8, Insure amortized its acquisition differential as follows:

                   Buildings                                  $ 11,700

                   Long-term liabilities                    (16,250)

                   Goodwill impairment loss          16,900

                                                                   $ 12,350

During 20X8, Go-med paid royalties of $162,500 to Insure, which Insure included in its other income.

During 20X8, Go-med sold land to a third party.  It had acquired the land 3 years ago from Insure.  At that time, Insure had recorded a profit on the sale of $29,250.

During 20X8, Go-med declared and paid dividends of $104,000.

Both Insure and Go-med pay taxes at an average rate of 40%.


Assume that Go-med is a joint venture owned by Insure and four other venturers, that the acquisition differentials are valid, and that it has not yet adopted IFRS 11: Joint Arrangements.  Prepare a 20X8 consolidated income statement for Insure using proportionate consolidation.

Posted Date: 2/12/2013 4:58:18 AM | Location : United States

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