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Problem $2(8$ Points$).$

Luball Corporation acquired an $80$ percent interest in Tocurt Corporation on January $2,20$X$2$ for $$800,000.$ On this date the capital stock and retained earnings of the two companies were as follows: $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Luball Tocurt

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Capital stock $$2,000,000$ $$500,000$

Retained earnings $600,000200,000$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

The assets and liabilities of Tocurt were stated at their fair values when Luball acquired its $80$ percent interest. Luball uses the equity method to account for its investment in Tocurt.

Net income and dividends for $20$X$2$ for the affiliated companies were:

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Luball Tocurt

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Net income $$300,000$ $$90,000$

Dividends declared $180,00050,000$

Dividends payable Dec. $31,20$X$290,00025,000$

$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

Required:

Calculate the amounts at which the following items should appear in the consolidated Financial statement on December $31,20$X$2$:

$1.$ Capital stock

$2.$ Goodwill

$3.$ Consolidated retained earnings

$4.$ Minority interest

$5.$ Dividends payable

$6.$ Investment income

$7.$ Consolidated $($controlling group$)$ Net Income

$8.$ Minority $($non$-$controlling$)$ income.

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