The Following Information Pertains to Questions

question 2

Essay

The following information pertains to questions
Brand X Inc.purchased a controlling interest in Brand Y Inc.for $200,000 on January 1,2001.On that date,Brand Y Inc had common stock and retained earnings worth $180,000 and $20,000,respectively.Goodwill is tested annually for impairment.At the date of acquisition,Brand Y's assets and liabilities were assessed for fair value as follows: The Balance Sheets of Both Companies,as at December 31,2001 are disclosed below: The net incomes for Brand X and Brand Y for the year ended December 31,2001 were $1,000 $48,000 respectively.An impairment test conducted on December 31,2001 revealed that the Goodwill should actually have a value $2,000 lower than the amount computed on the date of acquisition.Both companies use a FIFO system,and Brand Y's inventory on the date of acquisition was sold during the year.Brand X did not declare any dividends during the year.However,Brand Y paid $51,000 in dividends to make up for several years in which the company had never paid any dividends.Brand Y's equipment and patent have useful lives of 10 years and 6 years respectively from the date of acquisition.All bonds payable mature on January 1,2006.
-Prepare Brand X's Consolidated Balance Sheet as at December 31,2001,assuming that Brand X purchased 100% of Brand Y for $350,000.

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Definitions:

Whitings' Studies

Refers to research done by Beatrice and John Whiting on cultural influences on child development and behavior across different societies.

Prosocial

Referring to behavior that is intended to benefit others, such as helping, sharing, or cooperating.

Cultural Differences

are the variations in the practices, beliefs, and values of different societies and groups.

Bronfenbrenner's Ecological Model

A theoretical model that describes how the complex system of relationships among individuals and their environments affect human development.