On January 2, Year 5, Road Ltd. acquired 70% of the outstanding voting shares of Runner Ltd. The acquisition differential of $440,000 on that date was allocated in the following manner: Inventory Land Plant and equipment Patent Goodwill $140,000 90,000 100,000 40,000 70,000 $ 440,000 Estimated life 5 years Estimated life 8 years The Year 9 income statements for the two companies were as follows: Road $4,400,000 207,900 Runner $2,140,000 Sales Intercompany investment income Rental revenue Total income Materials used in manufacturing Changes in work-in-progress and finished goods inventory Employee benefits Interest expense Depreciation Patent amortization Rental expense Income tax Total expenses Profit 4,607,900 2,200,000 85,000 590,000 290,000 445,000 150,000 2,290,000 840,000 (10,000) 520,000 180,000 265,000 45,000 75,000 340,000 4,025,000 $ 582,900 189, 200 2,029,200 $ 260,800 Additional Information Runner regularly sells raw materials to Road. Intercompany sales in Year 9 totalled $460,000. Intercompany profits in the inventories of Road were as follows: O January 1, Year 9 December 31, Year 9 $187,000 80,000 O Road's entire rental expense relates to equipment rented from Runner. A goodwill impairment loss of $3,000 occurred in Year 9. Retained earnings at December 31, Year 9, for Road and Runner were $2,526,100 and $1,190,000, respectively. Road uses the equity method to account for its investment, and uses income tax allocation at the rate of 40% when it prepares consolidated statements. Required: (a) Prepare a consolidated income statement for Year 9 with expenses classified by nature. (Input all amounts as positive number except for Change in work-in-progress and finished goods inventory that must be entered with appropriate sign. Omit $ sign in your response.) S Road Ltd. Consolidated Income Statement for the Year Ended December 31, Year 9 Sales Rental revenue Total income Materials used in manufacturing Change in work-in-progress and finished goods inventory Employee benefits Interest expense Depreciation Patent amortization Goodwill impairment loss Income tax Total expenses Profit Attributable to: Shareholders of Road Non-controlling interests (b) Calculate consolidated retained earnings at December 31, Year 9. (Omit $ sign in your response.) Consolidated retained earnings $