Question

On January 1, 2009, Zaldivar acquired 75% of the share capital of Burran at a cost of $27,600. At this date, the capital of Burran consisted of 30,000 common shares, and retained earnings were $6,000.
At January 1, 2009, Burran had not recorded any goodwill, and all of its identifiable net assets were recorded at fair value except for inventory, which had a fair value of $10,000 and a carrying value of $14,000, and plant, which had a fair value of $20,000 and a carrying value of $15,000. The plant has a remaining life of four years. The inventory is recorded on a FIFO (first-in, first-out) basis. Zaldivar uses the partial goodwill method. The fair value of the non-controlling interest at January 1, 2009, was $9,000.
The trial balances of the two companies as at December 31, 2013, are as shown below.
Additional information:
1. Intragroup sales of inventory for the year ended December 31, 2013, from Burran to Zaldivar were $19,000.
2. Unrealized profits on inventory held at January 1, 2013: inventory held by Zaldivar purchased from Burran at a profit before tax of $800.
3. Unrealized profits on inventory held at December 31, 2013: inventory held by Zaldivar purchased from Burran at a profit before tax of $1,200.
4. The cumulative other comprehensive income account relates to financial assets held by Burran. The balance of this account at January 1, 2013, was $4,000.
5. The tax rate applicable is 30%.
Required
Prepare the consolidated financial statements for the year ended December 31, 2013.


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  • CreatedJune 09, 2015
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