Question Two (21 marks):

Toronto Corporation acquired 90 percent of London on January 1, 2019. Of London's total acquisition-date fair value, $60,000 was allocated to undervalued equipment (with a 10-year remaining life) and $80,000 was attributed to franchises (to be written off over a 20-year period).

Since the takeover, London has transferred inventory to its parent as follows:

Year	Cost		Transfer Price		Remaining at Year-End
2019	$	45,000	$	90,000	$	30,000 (at transfer price)
2020		48,000		80,000		35,000 (at transfer price)
2021		69,000		92,000		50,000 (at transfer price)

On January 1, 2020, Toronto sold London a building for $50,000 that had originally cost $70,000 but had only a $30,000 book value at the date of transfer. The building is estimated to have a five-year remaining life (straight-line depreciation is used with no salvage value).

Selected figures from the December 31, 2021, trial balances of these two companies are as follows:

	Toronto		London
Sales	$	700,000	$	400,000
Cost of goods sold		440,000		220,000
Operating expenses		120,000		80,000
Investment income	Not given			0
Inventory		210,000		90,000
Equipment (net)		140,000		110,000
Buildings (net)		350,000		190,000

Required: Determine consolidated totals for each of the above account balances.