On January 1, Year 6, HD Ltd., a building supply company, JC Ltd., a construction company, and Mr. Saeid, a private investor, signed an agreement to carry out a joint operation under the following terms and conditions: A partnership under the name of Olympic Homes would be established. JC would identify the homes for renovation. Olympic Homes would purchase the home and arrange a first mortgage on the property when the home is purchased for renovation and resale. JC would perform the renovation work at a discounted fee. HD would supply all of the construction materials at a reduced markup from its regular sales. Mr. Saeid would guarantee the payment of the mortgage and would lend money to Olympic for the down payment on the purchase of the property and to finance the cost of materials and labour during the renovation. The loans would be interest free with no monthly payments and would be repayable out of the proceeds on sale of the property. All three parties would each contribute $152,000 as start-up capital, would have a one-third interest in the assets, be responsible for one-third of the liabilities and would receive one-third of the profit from the Partnership. All three parties must agree on major operating and financing decisions with respect to operations carried out by Olympic. Condensed financial statements for HD Ltd. and Olympic for the year ended December 31, Year 6, were as follows: STATEMENTS OF FINANCIAL POSITION At December 31, Year 6 HD Ltd. Olympic Homes Assets Properties under renovation $ $ 516,000 Investment in Olympic Homes 152,000 Inventory 436,000 Cash 76,000 51,600 Other assets 1,252,000 768,000 $ 1,916,000 $ 1,335,600 Shareholders' Equity and Liabilities Ordinary shares/capital contributed $ 526,000 $ 456,000 Retained/accumulated earnings 298,000 43,500 Mortgage payable 228,000 Loan payable to Mr. Saeid 141,000 Accounts payable 406,000 234,000 Other liabilities 686,000 233,100 $ 1,916,000 $ 1,335,600 INCOME STATEMENTS For the Year Ended December 31, Year 6 HD Ltd. Olympic Homes Sales $ 2,350,000 $ 1,530,000 Income from Olympic 51,000 0 2,401,000 1,530,000 Cost of goods sold 1,645,000 994,500 Selling expenses 276,000 189,000 Other expenses 136,000 150,000 Income tax expense 106,000 0 2,163,000 1,333,500 Profit $ 238,000 $ 196,500 Additional information: During Year 6, HD had sales of $141,000 to JC at a markup of 20 percent of selling price. At December 31, Year 6, the property under renovation included supplies purchased from HD of $69,000. Olympic completed two projects under the joint operations. Olympic distributed $51,000 of income to each of the partners in December. HD accounts for its share of income from the joint operations when it is received from Olympic. HD pays income tax at a rate of 40%. The income earned by Olympic is not taxed in Olympic. It is flowed through and taxed in the hands of the partners. Required: Prepare corrected Year 6 financial statements for HD in accordance with IFRS 11. (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Omit $ sign in your response.) HD LTD. STATEMENTS OF FINANCIAL POSITION At December 31, Year 6 Assets Properties under renovation $ Inventory Cash Other assets $ Shareholders' Equity and Liabilities Ordinary shares $ Retained earnings Mortgage payable Loan payable to Mr. Saeid Accounts payable Other liabilities $ HD LTD. INCOME STATEMENTS For the Year Ended December 31, Year 6 Sales $ Income from Olympic $ Cost of goods sold $ Selling expenses Other expenses Income tax expense $ Profit $