On January 1 2011 Dataworx acquired 60 of the shares #11

On January 1, 2011, Dataworx acquired 60% of the shares of Glider for $111,700. At this date,
the equity of Glider consisted of: Share capital......... $120,000Retained earnings....... 40,000At
this date, the identi?able assets and liabilities of Glider were recorded at fair value except for the
following assets:The equipment has a further ?ve-year life. Half the inventory on hand at the
acquisition date was sold by December 31, 2011, with the remainder being sold in 2012. At
December 31, 2013, the goodwill was written down by $3,000 as the result of an impairment
test. Dataworx uses the full goodwill method. The fair value of the non-controlling interest at
January 1, 2011, was $74,100. During the three years since acquisition, Glider has recorded the
following annual results: Year ended Pro?tDecember 31, 2011....... $15,000December 31,
2012....... 27,000December 31, 2013....... 12,000There has been no dividend paid or declared
by Glider since the acquisition date. The equipment owned by Glider on January 1, 2011, was
sold on June 30, 2012, for $70,000. The tax rate is 30%. Required (a) Prepare the consolidated
?nancial statement adjustments as at January 1, 2011. (b) Prepare the consolidated ?nancial
statement adjustments for the year ended December 31, 2011. (c) Prepare the consolidated
?nancial statement adjustments for the year ended December 31, 2012. (d) Prepare the
consolidated ?nancial statement adjustments for the year ended December 31, 2013.View
Solution:
On January 1 2011 Dataworx acquired 60 of the shares

ANSWER
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