Question 2 (25 marks) On January 1, 2014, Prince Corporation acquired 70N of the 100,000 outumandinc voting shares of Sone Uimited for a cash consideration of $1.015,000. On that date, shyces of Song Uimited wete trading for $14.00 per share an the national stock eachange. The sharebolders equity of Song umited an the acquivition date consisted of common shares with a carving valoe ef 570.000 , conerituted surplus of $110,000 and retained earnings of $320,000. At the ansets and lubilibes of Sont were farty valued on its balance sheet except that capital assets were undervalued by 5120,000 and lang term debt with a book value of $210,000 had a fair value of $160,000. The capital anats had a remaining uneful tife of six years and the long term debt matured on December 31, 2018. Prince Corporation accounts for its investment in Song Uimited using the cost method and values the non-controlling interest in Sone Limited at as tair valoe at deternined from see market value of its shures on the acquisition date. The Financial statements of the two companies for the year ended December 31, 2016 appear on the nent page. Additional information: - Goodwill impairment tests ace carried out annually. During asa, roodwall impairment was determined to be $26,000 on the paremr's share of goodwall and $5,000 on the NOI share, in 2015, impairment in the amounts of $35,000 and \$6,000 respectively war found to have eccurred. - Song Company declared its 2016 dividends on December 15, 2016, with papment to be made on January 15, 2017. - Durine 2016, Prince charced rental fees ef 530,000 to Sone. Mince entimuted that its cost to provide the rental services to Sone was $20,000 for the rear. At December 31, 2016, Song owed Prince \$7,500 for the last quarter's tental senvices. - Ignore income taves on the allocation and amortiation of the arovistion deflesential. Required: Prepare the consoldated financial statements of Prince Corporntion and is subuidiary for the vear ended December 31, 2016