On January 2, Year 4, Brady Ltd., a private company, purchased 80% of the outstanding shares of Partridge Ltd. for $5,820,000. Partridges statement of financial position and the fair values of its identifiable assets and liabilities for that date were as follows:

	Carrying Amount			Fair Value
Plant and equipment (net)	$	5,350,000		$	5,350,000
Patents (net)		1,850,000			2,520,000
Inventory		2,850,000			3,220,000
Accounts receivable		2,350,000			2,350,000
Cash		670,000			670,000
	$	13,070,000
Ordinary shares	$	2,171,000
Retained earnings		3,520,000
10% bonds payable		3,850,000			4,320,000
Accounts payable		3,529,000			3,529,000
	$	13,070,000

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: $76,000
• Year 6: $59,250

Partridge declared and paid dividends of $130,000 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:

STATEMENT OF FINANCIAL POSITION
		Brady			Partridge
Plant and equipment (net)	$	9,700,000		$	6,700,000
Patents (net)					870,000
Investment in Partridge Ltd. (equity method)		6,255,000
Inventory		6,300,000			2,750,000
Accounts receivable		1,850,000			2,150,000
Cash		570,000			770,000
	$	24,675,000		$	13,240,000
Ordinary shares	$	5,850,000		$	2,171,000
Retained earnings		6,532,000			4,629,000
Bonds payable		4,850,000			3,850,000
Accounts payable		7,443,000			2,590,000
	$	24,675,000		$	13,240,000

INCOME STATEMENTS
		Brady			Partridge
Sales	$	10,850,000		$	5,850,000
Equity method income		151,000
		11,001,000			5,850,000
Cost of goods purchased		7,100,000			3,060,000
Change in inventory		87,000			195,000
Depreciation expense		1,070,000			417,000
Patent amortization expense					270,000
Interest expense		565,000			385,000
Other expenses		850,000			1,020,000
Income taxes		770,000			235,000
		10,442,000			5,582,000
Profit	$	559,000		$	268,000

Required:

(a) Prepare consolidated financial statements on December 31, Year 6. (Input all values as positive numbers.)

- Consolidated Income Statement

- Consolidated Statement of Financial Position