X – 80% Owned-subsidiary: Equity Method; Downstream and Upstream of property,

Unrealized Gain and Realized Gain on sale with Goodwill Impairment Loss recognized in
the books of Subsidiary ( Full-goodwill or Fair Value Basis)

Refer to the same data in Problem IX for determination of separate net income,
computation of full-goodwill, amortization of allocated excess, and impairment of goodwill.

Required: Using equity method- Full Goodwill

1. Prepare journal entry to record investment in the books of the acquirer company.
2. Prepare schedule for determination and allocate excess.
3. Prepare the working paper eliminating entries for 20x4 and 20x5 for purposes of
preparing consolidated balance sheet.
4. Prepare a consolidated wok paper on December 31, 20x4 and December 31, 20x5.

5. Determine the following items for January 1, 20x4:

a. Consolidated Retained earnings
b. Non-controlling interests
c. Consolidated stockholder’s Equity
d. Cost of equipment, accumulated depreciation and net book value

6. Determine the following items for December 31, 20x4 and December 31, 20x5:
a. Controlling Interests in Consolidated NET INCOME
b. Non-controlling Interests in Consolidated Net income
c. Consolidated Net income
d. Consolidated retained earnings
e. Non-Controlling Interests
f. Consolidated Stockholder’s Equity
g. Cost of equipment, accumulated depreciation and net book value