The account balances of Islewood Ltd. and Richmond Ltd. at January 1, 2013, were as follows:

The fair values of Richmond€™s assets at January 1, 2013, were:
Land .............240,000
Machinery............. 220,000
Inventory............. 95,000
The two companies decided to combine on January 1, 2013, with Islewood issuing one share (fair value $2) and $0.50 cash for each share in Richmond. Richmond€™s shares were acquired cum div. The tax rate is 30%.
Required
(a) Prepare the consolidated statement of financial position immediately after Islewood€™s acquisition of shares in Richmond.
(b) Prepare the consolidation process adjustments required for the consolidation at December 31, 2014, assuming both dividends were paid during September 2013. Assume all inventory on hand at January 1, 2013, was sold in the following three months, and that the machinery has a further four-year life.

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Islewood Richmond Share capital-600,000 shares 600,000 -200,000 shares 550,000 10,000 320,000 1,480,000 400,000 400,000 480,000 200,000 1,480,000 200,000 250,000 15,000 15,000 480,000 200,000 200,000 75,000 5,000 480,000 Retained earnings Dividend payable Provisions Land Machinery Inventory Cash