Financial statements of Par Corp. and its subsidiary Star Inc. on December $31,$ Year $12,$ are shown below: BALANCE SHEETS At December $31,$ Year $12$ Par Star Cash $ $40,000$ $ $1,000$ Accounts receivable $100,00085,000$ Inventories $55,00048,000$ Land $30,00070,000$ Plant and equipment $400,000700,000$ Accumulated depreciation $(180,000)(300,000)$ Investment in Star common shares $280,000$ $ $725,000$ $ $604,000$ Accounts payable $ $92,000$ $ $180,000$ Accrued liabilities $8,00010,000$ Preferred shares $50,000$ Common shares $450,000200,000$ Retained earnings $175,000164,000$ $ $725,000$ $ $604,000$ RETAINED EARNINGS STATEMENTS For the Year Ended December $31,$ Year $12$ Par Star Balance, January $1$ $ $195,000$ $ $208,000$ Net income $($loss$)15,000(24,000)210,000184,000$ Dividends $(35,000)(20,000)$ Balance, December $31$ $ $175,000$ $ $164,000$ Other Information On January $1,$ Year $5,$ the balance sheet of Star showed the following shareholders$$ equity: $$8$ cumulative preferred shares, $500$ shares issued $ $50,000$ Common shares, $2,000$ shares issued $200,000$ Deficit $($Note $1)(80,000)$ $$170,000$ Note $1$: Dividends on preferred shares are two years in arrears. On this date, Par acquired $1,400$ common shares of Star for a cash payment of $$280,000.$ The fair values of Star$$s identifiable net assets differed from carrying amounts only with respect to the following: Carrying amount Fair value Accounts receivable $ $42,000$ $ $40,000$ Inventory $65,00072,000$ Plant $600,000650,000$ Long$-$term liabilities $400,000420,000$ The plant had an estimated remaining useful life of five years on this date, and the long$-$term liabilities had a maturity date of December $30,$ Year $12.$ Any goodwill is to be tested annually for impairment. Both Par and Star make substantial sales to each other at an intercompany selling price that yields the same gross profit as the sales they make to unrelated customers. Intercompany sales in Year $12$ were as follows: Par to Star $ $400,000$ Star to Par $330,000$ During Year $12,$ Par billed Star $$2,000$ per month in management fees. At year$-$end, Star had paid for all months except for December. The January $1,$ Year $12,$ inventories of the two companies contained unrealized intercompany profits as follows: Inventory of Par $ $30,000$ Inventory of Star $21,000$ The December $31,$ Year $12,$ inventories of the two companies contained unrealized intercompany profits as follows: Inventory of Par $ $35,000$ Inventory of Star $37,000$ On July $1,$ Year $7,$ Star sold equipment to Par for $$82,000.$ The equipment had a carrying amount in the records of Star of $$60,000$ on this date and an estimated remaining useful life of five years. Goodwill impairment losses were recorded as follows: Year $7,$ $$92,500$; Year $9,$ $$46,470$; and Year $12,$ $$19,710.$ Assume a $40\%$ corporate tax rate. Par has accounted for its investment in Star by the cost method. All dividends in arrears were paid by December $31,$ Year $11.$ Required: $($a$)$ Prepare, with all necessary calculations, the following: $($i$)$ Year $12$ consolidated retained earnings statement. $($Input all amounts as positive values. Omit $ sign in your response.$)$ Par Corp. Consolidated Retained Earnings Statement Year Ended December $31,$ Year $12$ Balance January $1$ $ Net loss Dividends Balance December $31$ $ $($ii$)$ Consolidated balance sheet as at December $31,$ Year $12.($b$)$ How would the return on equity attributable to Par$$s shareholders for Year $12$ change if Star$$s preferred shares were non$-$cumulative instead of cumulative? multiple choice $1$ No Change Change $($c$)$ On January $1,$ Year $13,$ Star issued common shares for $$100,000$ in cash. Because Par did not purchase any of these shares, Par$$s ownership percentage declined from $70$ to $56\%.$ Calculate the gain or loss that would be charged or credited to consolidated shareholders$$ equity as a result of this transaction. $($Input all amounts as positive values. Round intermediate calculations and final answer to nearest dollar amount. Omit $ sign in your response.$)($Click to select$)$ Gain Loss $