On December 31, Year 1, Company A purchased 75% of Company B’s outstanding common shares for $150,000 in cash. On that date, the carrying amount of Company B’s assets and liabilities approximated their fair value, and the fair value of the non controlling interest (NCI) was $12,000. The following is the summarized balance sheet information for the two companies on December 31, Year 1, before the acquisition. Company A Company B
Current assets $200,000 $ 80,000
Non current assets 320,000 140,000
Current liabilities 70,000 45,000
Non current liabilities 110,000 55,000
Common stock 100,000 30,000
Retained earnings 90,000 70,000
Additional paid-in capital 150,000 20,000
-Additional information:
-Company B reported net income of $60,000 for the year ended December 31, Year 2. On December 1, Year 2, Company B declared and distributed a cash dividend of $40,000 to its common shareholders.
-On November 15, Year 2, Company A declared and distributed a cash dividend of $25,000 to its common shareholders.
-Company A reported net income of $110,000 in its separate statements for the year ended December 31, Year 2.
-In its separate statements, Company A accounts for its investment in Company B using the equity method.
-During Year 2, no shares of common stock were issued and no items of other comprehensive income were recognized either by Company A or by Company B.
-No intra entity transactions occurred during Year 2.
Use the information above to prepare Company A’s consolidated statement of changes in equity for the year ended December 31, Year 2