Question: Laughlin Ltd gained control of Harwood Ltd by acquiring all

Laughlin Ltd. gained control of Harwood Ltd. by acquiring all its shares on January 1, 2010. The equity at that date was:
Share capital .......... $100,000
Retained earnings.......... 35,000
At January 1, 2010, all the identifiable assets and liabilities of Harwood were recorded at fair value except for:
The inventory was all sold by December 31, 2010. The plant had a further five-year life but was sold on January 1, 2013, for $50,000. The land was sold in March 2011 for $150,000.
At January 1, 2010, Harwood had guaranteed a loan taken out by Swede Ltd. Harwood had not recorded a liability in relation to the guarantee but, as Swede was not performing well, Laughlin valued the contingent liability at $5,000. In January 2013, Swede repaid the loan. Harwood had also invented a special tool and patented the process. No asset was recorded by Harwood, but Laughlin valued the patent at $6,000, with an expected useful life of six years. The tax rate is 30%.
Financial information for these companies for the year ended December 31, 2013, is as follows:
Required
Prepare the consolidated financial statements for Laughlin Ltd. as at December 31, 2013.



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  • CreatedJune 09, 2015
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