On July 1, Year $, Big purchased 80% of the outstanding common shares of Little...
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Accounting
On July Year $ Big purchased of the outstanding common shares of Little for $ On that date, Little's equipment had a fair value that was $ less than carrying amount. The equipment had accumulated depreciation of $ and an estimated remaining useful life of years. Also, at the date of acquisition, Little had an exclusive contract with the provincial government to perform periodic environmental audits of selected mining companies for the next five years. An independent business valuator indicated that a third party might pay up to $ to take over this contract. All other assets and liabilities had earrying amounts equal to fair values. On June Year goodwill had a recoverable amount of $
On June Year the following financial statements were prepared. Big uses the cost method to account for its investment.
NCOME STATEMENTS
Big
Sales
Investment income
Cost of sales
Expenses misc
Net income
$
table
Link
RETAINED EARNINGS STATEMENTS
s
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