On January 2, Year 4, Brady Ltd., a private company, purchased 80% of the outstanding shares of Partridge Ltd. for $5,120,000. Partridge's statement of financial position and the fair values of its identifiable assets and liabilities for that date were as follows: Patents (net) Carrying Amount $ 5,000,000 1,500,000 Fair Value $5,000,000 2,100,000 2,800,000 2,000,000 600,000 Plant and equipment (net) Inventory Accounts receivable Cash Ordinary shares Retained earnings 10% bonds payable Accounts payable 2,500,000 2,000,000 600,000 $11,600,000 $ 2,101,000 3,100,000 3,500,000 2,899,000 $11,600,000 3,900,000 2,899,000 The patents had a remaining useful life of ten years on the acquisition date. The bonds were issued on January 1, Year 2, and mature on December 31, Year 13. Goodwill impairment losses were as follows: Year 4: $55,000 Year 6: $40,000 Partridge declared and paid dividends of $150,000 in Year 6. Brady uses ASPE for reporting purposes. It elected to use the straight-line method to amortize any premium or discount on bonds payable. On December 31, Year 6, the financial statements of the two companies were as follows: On December 31, Year 6, the financial statements of the two companies were as follows: STATEMENT OF FINANCIAL POSITION Brady Plant and equipment (net) Patents (net) Investment in Partridge Ltd. (equity method) Inventory Accounts receivable Cash $ 9,000,000 Partridge $ 6,000,000 800,000 5,475,200 5,600,000 1,500,000 Ordinary shares Retained earnings Bonds payable Accounts payable 500,000 $22,075,200 $ 5,500,000 6,462,000 4,500,000 2,400,000 1,800,000 700,000 $11,700,000 $ 2,101,000 3,999,000 3,500,000 5,613,200 2,100,000 $22,075,200 INCOME STATEMENTS Sales Equity method income Brady $10,500,000 Partridge $5,500,000 144,000 10,644,000 5,500,000 Cost of goods purchased 7,030,000 2,990,000 Change in inventory 80,000 160,000 Depreciation expense 1,000,000 410,000 Patent amortization expense 200,000 Interest expense 530,000 350,000 Other expenses Income taxes 780,000 950,000 Profit 700,000 10,120,000 $ 524,000 200,000 5,260,000 $ 240,000 $11,700,000 Required: (a) Prepare consolidated financial statements on December 31, Year 6. (Input all values as positive numbers.) Brady Ltd. Consolidated Income Statement for the Year Ended December 31, Year 6 Attributable to: Brady's shareholders Non-controlling interest $ $ 0 0 $ 0 Assets Brady Ltd. Consolidated Statement of Financial Position December 31, Year 6 $ 0 Liabilities and Equity $ 0