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On September 1,20X5,CanAir Limited Decided to Buy 100% of the Shares

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On September 1,20X5,CanAir Limited decided to buy 100% of the shares outstanding of SkyAir Inc.for $900,000.Can Air will pay for this acquisition by using cash of $500,000 and issuing share capital for the remaining amount.The balances showing on the statement of financial position for the two companies at August 31,20X5 are as follows:
On September 1,20X5,CanAir Limited decided to buy 100% of the shares outstanding of SkyAir Inc.for $900,000.Can Air will pay for this acquisition by using cash of $500,000 and issuing share capital for the remaining amount.The balances showing on the statement of financial position for the two companies at August 31,20X5 are as follows: After a review of the financial assets and liabilities,CanAir determines that some of the assets of SkyAir have fair values different from their carrying values.These items are listed below: • Land has a fair value of 225,000 • The building has a fair value of 1,090,000.The remaining useful life of the building is 20 years. • Internet domain name has a fair value is $55,000.The domain name is estimated to have a useful life of 5 years. • Customer lists has a fair value is $35,000.It is estimated that the customer lists will have a useful life of 7 years. During the 20X9 fiscal year,the following events occurred: 1.On March 1,20X9,SkyAir sold land to CanAir for $390,000,which had a carrying value of $275,000.Can Air paid for this with $90,000 cash and a note payable for the difference.This note pays interest at 10% which is paid monthly. 2.CanAir provided management expertise to SkyAir and charged management fees of $890,000. 3.CanAir sold supplies (included in CanAir sales)to SkyAir for $200,000.CanAir charged SkyAir an amount that was 25% above costs.SkyAir still has supplies on hand of $70,000. 4.In 20X8,SkyAir had provided seat space on flights to Can Air for a value of $500,000.This amount was included in sales for SkyAir.Profit margin on these sales is 40%.At the end of August,20X8,CanAir still had an amount of $200,000 in these prepaid seats that had not yet been used.(CanAir includes this in inventory. ) Statements of Financial Position As at August 31,20X9 Statements of Comprehensive Income For the year ended August 31,20X9 Required: Calculate the consolidated retained earnings as at August 31,20X9. Prepare the consolidated Statement of Financial Position for the year ended August 31,20X9.
After a review of the financial assets and liabilities,CanAir determines that some of the assets of SkyAir have fair values different from their carrying values.These items are listed below:
• Land has a fair value of 225,000
• The building has a fair value of 1,090,000.The remaining useful life of the building is 20 years.
• Internet domain name has a fair value is $55,000.The domain name is estimated to have a useful life of 5 years.
• Customer lists has a fair value is $35,000.It is estimated that the customer lists will have a useful life of 7 years.
During the 20X9 fiscal year,the following events occurred:
1.On March 1,20X9,SkyAir sold land to CanAir for $390,000,which had a carrying value of $275,000.Can Air paid for this with $90,000 cash and a note payable for the difference.This note pays interest at 10% which is paid monthly.
2.CanAir provided management expertise to SkyAir and charged management fees of $890,000.
3.CanAir sold supplies (included in CanAir sales)to SkyAir for $200,000.CanAir charged SkyAir an amount that was 25% above costs.SkyAir still has supplies on hand of $70,000.
4.In 20X8,SkyAir had provided seat space on flights to Can Air for a value of $500,000.This amount was included in sales for SkyAir.Profit margin on these sales is 40%.At the end of August,20X8,CanAir still had an amount of $200,000 in these prepaid seats that had not yet been used.(CanAir includes this in inventory. )
Statements of Financial Position
As at August 31,20X9
On September 1,20X5,CanAir Limited decided to buy 100% of the shares outstanding of SkyAir Inc.for $900,000.Can Air will pay for this acquisition by using cash of $500,000 and issuing share capital for the remaining amount.The balances showing on the statement of financial position for the two companies at August 31,20X5 are as follows: After a review of the financial assets and liabilities,CanAir determines that some of the assets of SkyAir have fair values different from their carrying values.These items are listed below: • Land has a fair value of 225,000 • The building has a fair value of 1,090,000.The remaining useful life of the building is 20 years. • Internet domain name has a fair value is $55,000.The domain name is estimated to have a useful life of 5 years. • Customer lists has a fair value is $35,000.It is estimated that the customer lists will have a useful life of 7 years. During the 20X9 fiscal year,the following events occurred: 1.On March 1,20X9,SkyAir sold land to CanAir for $390,000,which had a carrying value of $275,000.Can Air paid for this with $90,000 cash and a note payable for the difference.This note pays interest at 10% which is paid monthly. 2.CanAir provided management expertise to SkyAir and charged management fees of $890,000. 3.CanAir sold supplies (included in CanAir sales)to SkyAir for $200,000.CanAir charged SkyAir an amount that was 25% above costs.SkyAir still has supplies on hand of $70,000. 4.In 20X8,SkyAir had provided seat space on flights to Can Air for a value of $500,000.This amount was included in sales for SkyAir.Profit margin on these sales is 40%.At the end of August,20X8,CanAir still had an amount of $200,000 in these prepaid seats that had not yet been used.(CanAir includes this in inventory. ) Statements of Financial Position As at August 31,20X9 Statements of Comprehensive Income For the year ended August 31,20X9 Required: Calculate the consolidated retained earnings as at August 31,20X9. Prepare the consolidated Statement of Financial Position for the year ended August 31,20X9.
Statements of Comprehensive Income
For the year ended August 31,20X9
On September 1,20X5,CanAir Limited decided to buy 100% of the shares outstanding of SkyAir Inc.for $900,000.Can Air will pay for this acquisition by using cash of $500,000 and issuing share capital for the remaining amount.The balances showing on the statement of financial position for the two companies at August 31,20X5 are as follows: After a review of the financial assets and liabilities,CanAir determines that some of the assets of SkyAir have fair values different from their carrying values.These items are listed below: • Land has a fair value of 225,000 • The building has a fair value of 1,090,000.The remaining useful life of the building is 20 years. • Internet domain name has a fair value is $55,000.The domain name is estimated to have a useful life of 5 years. • Customer lists has a fair value is $35,000.It is estimated that the customer lists will have a useful life of 7 years. During the 20X9 fiscal year,the following events occurred: 1.On March 1,20X9,SkyAir sold land to CanAir for $390,000,which had a carrying value of $275,000.Can Air paid for this with $90,000 cash and a note payable for the difference.This note pays interest at 10% which is paid monthly. 2.CanAir provided management expertise to SkyAir and charged management fees of $890,000. 3.CanAir sold supplies (included in CanAir sales)to SkyAir for $200,000.CanAir charged SkyAir an amount that was 25% above costs.SkyAir still has supplies on hand of $70,000. 4.In 20X8,SkyAir had provided seat space on flights to Can Air for a value of $500,000.This amount was included in sales for SkyAir.Profit margin on these sales is 40%.At the end of August,20X8,CanAir still had an amount of $200,000 in these prepaid seats that had not yet been used.(CanAir includes this in inventory. ) Statements of Financial Position As at August 31,20X9 Statements of Comprehensive Income For the year ended August 31,20X9 Required: Calculate the consolidated retained earnings as at August 31,20X9. Prepare the consolidated Statement of Financial Position for the year ended August 31,20X9.
Required:
Calculate the consolidated retained earnings as at August 31,20X9.
Prepare the consolidated Statement of Financial Position for the year ended August 31,20X9.

Definitions:

Weighted Average Cost

A method of valuing inventory and cost of goods sold that considers the cost of each item in proportion to its quantity.

Perpetual Inventory

Perpetual inventory is a system that continuously updates inventory records to reflect sales, purchases, and inventory levels in real-time.

Inventory Turnover

A metric indicating the frequency at which a company's stock is sold and replenished within a given timeframe.

Sales In Inventory

The quantity of goods that are available for sale in a company's inventory.

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