Problem 4-4

(1) Goodwill at Dec 31, 2018

Preliminary analysis:
Cost of investment 4,800,000
Implied value (75%) 6,400,000
BV of equity ###
Unamortized excess 1,600,000
UV of inventory (10% 160,000
UV of plant assets (4 640,000
Goodwill (50% x 1,600 800,000
1,600,000

(2) NCIS 2018

Net income {(2,000-1,200) x 25% 200,000
UV of plant assets (640/8 x 25%) -20,000
NCIS 180,000

(3) Consolidated RE Dec 31, 2017: 3,340,000

(4) Consolidated RE Dec 31, 2018:

Beginning RE 3,340,000
Net income {(8,000+540-6,370) 2,170,000
Dividend ###
Ending RE 4,510,000

(5) Consolidated net income 2018:

Net income of Pim 2,170,000
NCIS 180,000
Consolidated net income 2,350,000