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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Carrying amount Fair value Inventory Land Plant (cost $120,000) $18,000 120,000 95,000 $22,000 130,000 98,000 Laughlin $50,000 (20,000) 30,000 37,000 20,000 $47,000 150,000 47,000 197,000 61,000 25,000 86,000 283,000 $ 5,000 10,000 30,000 78,000 160,000 283,000 Harwood 15,000 (6,000) 9,000 25,000 Profit before tax Income tax expense Profit for the year Retained earnings (January, 2013) Dividend paid Retained earnings (December 31, 2013) Share capital Retained earnings $34,000 $100,000 34,000 134,000 32,000 Total equity Payables Loan 32,000 66,000 Total liabilities Total equity and liabilities Cash Available-for-sale financial assets Inventory Plant and equipment Investment in Harwood Ltd Total assets $14,000 5,000 21,000 126,000 166,000