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On January 1 , Year 4, Grant Corporation bought 2,000(80%) of the outstanding common shares of Devy Company for $17,500 cash. Devy's shares were trading for $7 per share on the date of acquisition. On that date, Devy had $6,250 of common shares outstanding and $7,500 retained earnings. Also on that date, the carrying amount of each of Devy's identifiable assets and liabilities was equal to its fair value except for the following: The patent had an estimated useful life of five years at January 1, Year 4, and the entire inventory was sold during Year 4. Grant uses the cost method to account for its investment. The following are the separate-entity financial statements of Grant and Devy as at December 31, Year 7: Additional Information - The recoverable amount for goodwill was determined to be $2,500 on December 31, Year 7. The goodwill impairment loss occurred in Year 7. - Grant's accounts receivable contains $7,500 owing from Devy. - Amortization expense is grouped with distribution expenses and impairment losses are grouped with other expenses. Required: (a) Calculate consolidated retained earnings at December 31, Year 7. (Input all values as positive numbers. Omit $ and % sign in your response.) (b) Prepare consolidated financial statements for Year 7. (Input all values as positive numbers.) \begin{tabular}{|l|l|} \hline \multicolumn{2}{|c|}{ Grant Corporation } \\ \hline \multicolumn{2}{|c|}{ Consolidated Balance Sheet - December 31, Year 7 } \\ \hline Assets & \\ \hline Cash & \\ \hline Accounts receivable & \\ \hline Inventory & \\ \hline \hline Equipment & \\ \hline Patent & \\ \hline \hline & \\ \hline \hline & \\ \hline & \\ \hline & \\ \hline Liabilities and Equity & \\ \hline & \\ \hline \hline & \\ \hline \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline \end{tabular} On January 1 , Year 4, Grant Corporation bought 2,000(80%) of the outstanding common shares of Devy Company for $17,500 cash. Devy's shares were trading for $7 per share on the date of acquisition. On that date, Devy had $6,250 of common shares outstanding and $7,500 retained earnings. Also on that date, the carrying amount of each of Devy's identifiable assets and liabilities was equal to its fair value except for the following: The patent had an estimated useful life of five years at January 1, Year 4, and the entire inventory was sold during Year 4. Grant uses the cost method to account for its investment. The following are the separate-entity financial statements of Grant and Devy as at December 31, Year 7: Additional Information - The recoverable amount for goodwill was determined to be $2,500 on December 31, Year 7. The goodwill impairment loss occurred in Year 7. - Grant's accounts receivable contains $7,500 owing from Devy. - Amortization expense is grouped with distribution expenses and impairment losses are grouped with other expenses. Required: (a) Calculate consolidated retained earnings at December 31, Year 7. (Input all values as positive numbers. Omit $ and % sign in your response.) (b) Prepare consolidated financial statements for Year 7. (Input all values as positive numbers.) \begin{tabular}{|l|l|} \hline \multicolumn{2}{|c|}{ Grant Corporation } \\ \hline \multicolumn{2}{|c|}{ Consolidated Balance Sheet - December 31, Year 7 } \\ \hline Assets & \\ \hline Cash & \\ \hline Accounts receivable & \\ \hline Inventory & \\ \hline \hline Equipment & \\ \hline Patent & \\ \hline \hline & \\ \hline \hline & \\ \hline & \\ \hline & \\ \hline Liabilities and Equity & \\ \hline & \\ \hline \hline & \\ \hline \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline \end{tabular}