On January 1, 2015, Peach Corporation (a publicly-traded Canadian company) purchased 75% of the common shares in Strawberry Ltd. for $1,650,000. At the time, Strawberry had 600.000 common shares outstanding with a book value of $1,200,000. Strawberry's retained earnings on the date of acquisition were $380.000. Peach reviewed Strawberry's balance sheet, and concluded: Strawberry's accounts receivable were overstated by $12,000. Some of Strawberry's inventory had a fair value $65.000 more than reported on Strawberry's balance sheet. Some of Strawberry's equipment had a fair market value $220,000 greater than the carrying value on Strawberry's books. The equipment had an estimated remaining useful life of 8 years on the date of acquisition. The land on Strawberry's books had a fair market value $113,000 lower than what was reported on Strawberry's balance sheet. Following are the financial statements for Peach and Strawberry as at December 31, 2020: Peach Strawberry S 25,200 465,300 725,400 Assets: Cash Accounts receivable Inventories Investment in Strawberry Land Plant and equipment (net) Total assets Liabilities and shareholders' equity: Accounts payable Long-term liabilities Deferred income taxes payable Common shares, no par value Retained earnings Total liabilities and shareholders' equity $ 775,500 325,600 1,625,400 1,650,000 7,500,000 6,750,500 $ 18,627,000 1,200,000 1,325,100 3,741,000 230,100 900,000 365,200 9,000,000 8,131,700 18,627,000 195.300 750,000 62,700 1,200,000 1,533,000 3,741,000 s S Income Statements Sales Peach $ 11,200,000 Strawberry S 1,950,000 Cost of goods sold Depreciation expense Selling and administrative expense Income tax expense Total expenses 8,700,000 585,000 925,650 425,600 $ 10.636,250 1,400,000 215,000 180,000 72,000 1,867,000 s Net income $ 563,750 $ 83,000 ADDITIONAL INFORMATION: Peach tested the goodwill on its books annually for impairment. The impairment testing revealed a $120,000 impairment of goodwill in 2016, and a $90,000 impairment in 2017. The 2020 impairment test revealed a $12,000 decline in value of goodwill. Both companies depreciated all property, plant, and equipment using the straight- line method, and both companies used the FIFO inventory flow assumption to value inventories. There were no intercompany transactions during the year, and neither company declared or paid any dividends. REQUIRED: Prepare a consolidated income statement and a consolidated balance sheet for Peach Corporation for the year ended December 31, 2020. All calculations must be shown in an orderly manner, including totals for each account balance, to obtain marks. On January 1, 2015, Peach Corporation (a publicly-traded Canadian company) purchased 75% of the common shares in Strawberry Ltd. for $1,650,000. At the time, Strawberry had 600.000 common shares outstanding with a book value of $1,200,000. Strawberry's retained earnings on the date of acquisition were $380.000. Peach reviewed Strawberry's balance sheet, and concluded: Strawberry's accounts receivable were overstated by $12,000. Some of Strawberry's inventory had a fair value $65.000 more than reported on Strawberry's balance sheet. Some of Strawberry's equipment had a fair market value $220,000 greater than the carrying value on Strawberry's books. The equipment had an estimated remaining useful life of 8 years on the date of acquisition. The land on Strawberry's books had a fair market value $113,000 lower than what was reported on Strawberry's balance sheet. Following are the financial statements for Peach and Strawberry as at December 31, 2020: Peach Strawberry S 25,200 465,300 725,400 Assets: Cash Accounts receivable Inventories Investment in Strawberry Land Plant and equipment (net) Total assets Liabilities and shareholders' equity: Accounts payable Long-term liabilities Deferred income taxes payable Common shares, no par value Retained earnings Total liabilities and shareholders' equity $ 775,500 325,600 1,625,400 1,650,000 7,500,000 6,750,500 $ 18,627,000 1,200,000 1,325,100 3,741,000 230,100 900,000 365,200 9,000,000 8,131,700 18,627,000 195.300 750,000 62,700 1,200,000 1,533,000 3,741,000 s S Income Statements Sales Peach $ 11,200,000 Strawberry S 1,950,000 Cost of goods sold Depreciation expense Selling and administrative expense Income tax expense Total expenses 8,700,000 585,000 925,650 425,600 $ 10.636,250 1,400,000 215,000 180,000 72,000 1,867,000 s Net income $ 563,750 $ 83,000 ADDITIONAL INFORMATION: Peach tested the goodwill on its books annually for impairment. The impairment testing revealed a $120,000 impairment of goodwill in 2016, and a $90,000 impairment in 2017. The 2020 impairment test revealed a $12,000 decline in value of goodwill. Both companies depreciated all property, plant, and equipment using the straight- line method, and both companies used the FIFO inventory flow assumption to value inventories. There were no intercompany transactions during the year, and neither company declared or paid any dividends. REQUIRED: Prepare a consolidated income statement and a consolidated balance sheet for Peach Corporation for the year ended December 31, 2020. All calculations must be shown in an orderly manner, including totals for each account balance, to obtain marks