Peach Ltd. acquired 70% of the common shares of Cherry Company on January 1, Year 4. On that date, Cherry had common shares of $600,000 and retained earnings of $300,000. The following is a summary of...

Peach Ltd. acquired 70% of the common shares of Cherry Company on January 1, Year 4. On that date, Cherry had common shares of $600,000 and retained earnings of $300,000. The following is a summary of the changes in Peach’s investment account from January 1, Year 4, to December 31, Year 6: Additional Information • Dividends declared by Cherry each year were equal to 50% of Cherry’s reported profit each year. • On January 1, Year 4, the carrying amounts of the identifiable net assets of Cherry were equal to fair values. Required: Calculate the following: (a) The amount of dividends declared by Cherry in Year 4 (b) The reported profit of Cherry for Year 5 (c) The amount for non-controlling interest that would appear in the Year 6 consolidated income statement and statement of financial position (d) The amount of goodwill that would appear on the December 31, Year 6, consolidated statement of financial position View Solution:

Peach Ltd acquired 70 of the common shares of Cherry