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 $ 49,000 $ 1,900 Accounts receivable 109,000 94,000 Inventories 85,320 57,000 Land 39,000 79,000 Plant and equipment 440,000 790,000 Accumulated depreciation (189, 000) (309,000) Investment in Star common shares 221,200 $ 754,520 $ 712,900 Accounts payable $ 95,600 $ 189,000 Accrued liabilities 8,900 11,800 Preferred shares 59,000 Common shares 450,000 160,000 Retained earnings 200,020 293, 100 $ 754,520 $ 712,900 RETAINED EARNINGS STATEMENTS For the Year Ended December 31, Year 12 Par Star Balance, January 1 $210,020 $342,100 Net income (loss) 23,000 (20,000) 233, 220 322,100 Dividends (33,000) (29,000) Balance, December 31 $200,020 $293, 100 Other Information . On January 1, Year 5, the balance sheet of Star showed the following shareholders' equity: $8 cumulative preferred shares, see shares issued Common shares, 2,800 shares issued Deficit (Note 1) $ 59,000 160,000 (89,880) $130,000 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 $221,200. The fair values of Star's identifiable net assets differed from carrying amounts only with respect to the following: Accounts receivable Inventory Plant Long-term liabilities Carrying amount $ 43,000 53,000 540,000 316,000 Fair value $ 41,000 60,000 590,000 336,000 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 Star to Par $ 280,000 357,000 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 Inventory of Star $ 23,000 22,000 The December 31, Year 12, inventories of the two companies contained unrealized intercompany profits as follows: Inventory of Par Inventory of Star $44,000 46,000 On July 1. Year 7. Star sold equipment to Par for $68,000. The equipment had a carrying amount in the records of Star of $48,000 on this date and an estimated remaining useful life of five years. Goodwill impairment losses were recorded as follows: Year 7,879,000; Year 9, $49,170; and Year 12, $20,160. 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: (6) Prepare, with all necessary calculations, the following Year 12 consolidated retained earnings statement. (input all amounts as positive values. Omit S 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 MI) Consolidated balance sheet as at December 31, Year 12. Par Corp Consolidated Balance Sheet as at December 31, Year 12 Assets Liabilities and Equity $ 0 (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? O No Change Change (e) 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 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 $ 49,000 $ 1,900 Accounts receivable 109,000 94,000 Inventories 85,320 57,000 Land 39,000 79,000 Plant and equipment 440,000 790,000 Accumulated depreciation (189, 000) (309,000) Investment in Star common shares 221,200 $ 754,520 $ 712,900 Accounts payable $ 95,600 $ 189,000 Accrued liabilities 8,900 11,800 Preferred shares 59,000 Common shares 450,000 160,000 Retained earnings 200,020 293, 100 $ 754,520 $ 712,900 RETAINED EARNINGS STATEMENTS For the Year Ended December 31, Year 12 Par Star Balance, January 1 $210,020 $342,100 Net income (loss) 23,000 (20,000) 233, 220 322,100 Dividends (33,000) (29,000) Balance, December 31 $200,020 $293, 100 Other Information . On January 1, Year 5, the balance sheet of Star showed the following shareholders' equity: $8 cumulative preferred shares, see shares issued Common shares, 2,800 shares issued Deficit (Note 1) $ 59,000 160,000 (89,880) $130,000 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 $221,200. The fair values of Star's identifiable net assets differed from carrying amounts only with respect to the following: Accounts receivable Inventory Plant Long-term liabilities Carrying amount $ 43,000 53,000 540,000 316,000 Fair value $ 41,000 60,000 590,000 336,000 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 Star to Par $ 280,000 357,000 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 Inventory of Star $ 23,000 22,000 The December 31, Year 12, inventories of the two companies contained unrealized intercompany profits as follows: Inventory of Par Inventory of Star $44,000 46,000 On July 1. Year 7. Star sold equipment to Par for $68,000. The equipment had a carrying amount in the records of Star of $48,000 on this date and an estimated remaining useful life of five years. Goodwill impairment losses were recorded as follows: Year 7,879,000; Year 9, $49,170; and Year 12, $20,160. 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: (6) Prepare, with all necessary calculations, the following Year 12 consolidated retained earnings statement. (input all amounts as positive values. Omit S 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 MI) Consolidated balance sheet as at December 31, Year 12. Par Corp Consolidated Balance Sheet as at December 31, Year 12 Assets Liabilities and Equity $ 0 (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? O No Change Change (e) 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