On December 31, Year 3, Tim Corp. acquired 80% of the outstanding shares of Hortins Inc. for a total cost of $245,000. The carrying amount of Hortinss assets, liabilities, and equity was equal to fair value except for the following:

	Carrying Amount	Fair Value
Inventory	$ 60,500	$ 69,000
Equipment, net	275,000	281,000
Patent		41,000
Long-term debt	185,000	161,000
Common shares	180,000
Retained earnings	43,000

As at December 31, Year 3, the equipment and patent had an estimated useful life of six and eight years, respectively. The long-term debt is due on January 1, Year 9. There was a goodwill impairment loss of $3,000 in Year 5. There were no other impairment losses.

Tim uses the cost method to account for its investment in Hortins. The book values of selected accounts for the year ended December 31, Year 7 were as follows:

		Tim		Hortins
Dividend income	$	12,500
Net income		63,000	$	27,000
Common shares		102,500		180,000
Retained earnings		260,000		120,000

Required:

Prepare a schedule of changes to the acquisition differential for the four year period ending December 31, Year 7. (10 marks)

Calculate consolidated net income attributable to the parent, ending retained earnings and non-controlling interest at December 31, Year 7. (15 marks)