Analysis and Calculations Should Be Made Based on Current Canadian

question 41

Essay

Analysis and calculations should be made based on current Canadian GAAP.
The following are the 2010 Income Statements of Roller Corp and Larmer Corp. Other Information:
During 2010 Larmer paid dividends of $24,000.Roller acquired its 30% stake in Roller at a cost of $400,000 and uses the cost method to account for its investment.Roller's investment in Larmer shall not be considered a control investment.
The acquisition differential amortization schedule showed the following write-off for 2010: During 2010,Larmer paid rent to Roller in the amount of $12,000,which Roller has recorded as other income.
In 2010,Roller sold Land to Larmer and recorded a profit of $10,000 on the sale.During 2010,Larmer sold the land to a third party.
Both companies are subject to a 40% tax rate.
-Assuming that Larmer is NOT a joint venture and that it is also NOT a portfolio investment,prepare Roller's 2010 Income Statement in accordance with current Canadian GAAP.

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Definitions:

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