On January 1 2009 Kundi acquired cum div a 70 #19

On January 1, 2009, Kundi acquired (cum div.) a 70% interest in Eagle. The following balances
appeared in the records of Eagle at this date: Share capital—100,000 shares...
$100,000Retained earnings ......... 72,000Dividend payable......... 5,000At January 1, 2009, the
carrying amounts and fair values of Eagle’s identi?able assets and liabilities were as shown
below.Any differences between carrying amounts at acquisition and fair values are adjusted on
consolidation. The noncurrent assets were deemed to have the following remaining useful lives:
Vehicles........ 5 yearsPlant......... 8 yearsFurniture and ?xtures... 7 yearsIn addition, Eagle had
recorded goodwill of $3,500 at January 1, 2009. Kundi uses the partial goodwill method. The
following events occurred between the acquisition date and December 31, 2012. 1. By
December 31, 2012, 80% of the inventory on hand at January 1, 2009, had been sold, and all
accounts receivable deemed to be collectable at January 1, 2009, had been received. 2. On
February 15, 2011, the dividend declared as at January 1, 2010, was paid. 3. On 15 September
2011, Eagle paid a $12,000 dividend. 4. On December 20, 2012, Eagle declared a dividend of
$5,000 from pre-acquisition pro?ts. The dividend was paid on February 10, 2013. For the year
ended December 31, 2013, the following information is available: 1. Kundi recognizes dividend
revenue when the dividends are declared by Eagle. 2. The balance of the Investment in Eagle
account was $119,380 at December 31, 2013. 3. On December 31, 2013, vehicles on hand at
the acquisition date were sold for $6,500. 4. The company tax rate is 30%. 5. Kundi’s share
capital has always been $200,000. 6. Financial information for the year ended December 31,
2013, included the following:Required Prepare the consolidated statement of changes in equity
of Kundi at December 31, 2013.View Solution:
On January 1 2009 Kundi acquired cum div a 70

ANSWER
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