At the end of 20X7, the condensed statements of financial position and statements of comprehensive income of Office Plus Corporation and Plus Limited were as they appear below. Intercompany activities were as follows:

1. Plus sold all of its opening (i. e., December 31, 20X6) inventory including that acquired from Office Plus (see P4- 1).

2. Plus purchased merchandise from Office Plus for $ 400,000. This price included a 25% markup over the cost to Office Plus. At year- end, 40% of these goods were still in Plus’s inventory.

3. Plus sold to Office Plus some merchandise for $ 120,000. Plus had acquired the merchandise for $ 100,000. The merchandise was all in Office Plus’s inventory at year- end, but is expected to sell for $ 150,000 in 20X8.

4. Plus fully repaid Office Plus the $ 80,000 loan that had been outstanding at the beginning of the year, plus $ 7,000 in interest ($ 2,000 of the interest pertained to 20X6).

5. Office Plus purchased a plot of land in Calgary for $ 100,000 and resold it to plus for $ 140,000.

Required

Prepare a consolidated statement of income and retained earnings and a consolidated SFP for Office Plus Corporation for 20X7.

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Statements of Financial Position December 31, 20X7 Plus 10,000 60,000 195,000 520,000 (60,000) OfficePlus 50,000 230,000 470,000 560,000 (230,000) 200,000 140,000 1,420,000 360,000 250,000 50,000 760,000 $1,420,000 Cash Accounts and other receivables Inventories Capital assets Accumulated depreciation Investment in Plus Other investments Accounts and other payables Long-term liabilities Common shares Retained eamings $725,000 750,000 230,000 200,000 45,000 $725,000 Statements of Comprehensive Income Year Ended December 31,20X7 $2,300,000 100,000 2,400,000 2,100,000 300,000 $720,000 Sales Other income 720,000 650,000 Expenses Net income 70,000 Statements of Changes in Equity-Retained Earnings Section Year Ended December 31, 20X7 Retained eamings, December 31, 20x6 Net income Dividends Retained eamings, December 31, 20x7 680,000 300,000 (220,000) 760,000 20,000 70,000 (45,000) 45,000