Saved 1 Cash Accounts receivable Inventories Land Plant and equipment Accumulated depreciation At December 31, Year 12 Investment in Star common shares Accounts payable Accrued liabilities Preferred shares Book Print Common shares erences Retained earnings Par $ 61,000 $ Star 3,100 121,000 106,000 83,880 69,000 51,000 91,000 560,000 910,000 (201,000) (321,000) 238,000 $ 913,880 $858,100 $ 100,400 $201,000 10,100 14,200 71,000 450,000 200,000 353,380 371,900 $ 913,880 $858,100 RETAINED EARNINGS STATEMENTS For the Year Ended December 31, Year 12 Balance, January 1 Net income (loss) Dividends Balance, December 31 Star Par $348,380 $444,900 35,000 (32,000) 383,380 412,900 (30,000) (41,000) $353,380 $371,900 Other Information 1 ints ellook Print References Other Information On January 1, Year 5, the balance sheet of Star showed the following shareholders' equity $8 cumulative preferred shares, 500 shares issued Common shares, 2,000 shares issued Deficit (Note 1) Note 1: Dividends on preferred shares are two years in arrears. $ 71,000 200,000 (93,000) $178,000 On this date, Par acquired 1,400 common shares of Star for a cash payment of $238,000. The fair values of Star's identifiable net assets differed from carrying amounts only with respect to the following: Accounts receivable Inventory Plant Long-term liabilities Carrying Comount fair value $55,000 $ 53,000 65,000 600,000 72,000 650,000 340,000 360,000 The plant had an estimated remaining useful life of five years on this date, and the long-term liabilities had a maturity date of December 30, Year 12. Any goodwill is to be tested annually for impairment. hstantial sales to each other at an intercompany selling price that yields the same gross profit as the sales The plant had an estimated remaining useful life of five years on this date, and the long-term liabilities had a maturity date of December 30, Year 12. Any goodwill is to be tested annually for impairment. Both Par and Star make substantial sales to each other at an Intercompany selling price that yields the same gross profit as the sales they make to unrelated customers. Intercompany sales in Year 12 were as follows: Par to Star ! Star to Par $ 400,000 393,000 ces During Year 12, Par billed Star $2,000 per month in management fees. At year-end, Star had paid for all months except for December. The January 1, Year 12, inventories of the two companies contained unrealized intercompany profits as follows: Inventory of Par Inventory of Star $ 35,000 34,000 The December 31, Year 12, inventories of the two companies contained unrealized intercompany profits as follows: Inventory of Pari Inventory of Star $ 56,000 58,000 On July 1, Year 7. Star sold equipment to Par for $80,000. The equipment had a carrying amount in the records of Star of $60,000 on this date and an estimated remaining useful life of five years. Goodwill impairment losses were recorded as follows: Year 7. $85,000; Year 9, $52,770; and Year 12. $20,760. Assume a 40% corporate tax rate. Par has accounted for its investment in Star by the cost method. All dividends in arrears were paid by December 31, Year 11. Required: (a) Prepare, with all necessary calculations, the following: (i) Year 12 consolidated retained earnings statement. (Input all amounts as positive values. Omit $ sign in your response.) Par Corp. Consolidated Retained Earnings Statement Year Ended December 31, Year 12 Balance January 11 Net loss $348380 51262 297118 Dividends 30000 Balance December 31 $ 267118 (ii) Consolidated balance sheet as at December 31, Year 12. Par Corp. Consolidated Balance Sheet as at December 31, Year 12 Assets Accounts receivable $ 225,000 Cash 64,100 Inventory 38,880 Land 142,000 Plant and equipment (net) 948,000 Deferred income tax 45,600 Goodwill 158,530