On January 1, 2012, Tilford acquired all the shares of Sifton for $137,200. At acquisition date, the equity of Sifton consisted of:

Share capital .................. $80,000
Retained earnings ........... 37,000

On this date, all the identifiable assets and liabilities of Sifton were recorded at fair value except for the following assets:

The inventory and land on hand in Sifton at January 1, 2012, were sold during the following 12 months. The motor vehicles, which at acquisition date were estimated to have a four-year life, were sold on June 30, 2013. The furniture and fixtures were estimated to have a further eight-year life. At January 1, 2012, Sifton had not recorded any goodwill.
The following trial balances were prepared for the companies at December 31, 2013:

Additional information:
1. Intragroup transfers of inventory consisted of:

2012:
Sales from Tilford to Sifton ........................................... $12,000
Profit in inventory on hand 31/12/12 ................................ 200
2013:
Sales from Tilford to Sifton ............................................ 15,000
Profit in inventory on hand 31/12/13
(incl. $50 from previous period sales) ............................ 1,000

2. On June 30, 2013, Sifton sold furniture and fixtures to Tilford for $8,000. This had originally cost Sifton $12,000 and had a carrying amount at time of sale of $7,000. Both entities charge depreciation at the rate of 10% p.a. on cost.
3. The tax rate is 40%.

Required
Prepare the consolidated financial statements for the period ended December 31, 2013.

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Carrying amount Fair value $50,000 15,000 24,000 18,480 $56,000 16,000 32,000 24,480 Inventory Motor vehicles (cost $18,000) Furniture and fixtures (cost $30,000) Land Tilford Sifton Credits $ 80,000 Share capital Retained earnings (1/1/13) $170,000 57,000 120,000 10,000 8,000 34,800 51,500 Bonds Final dividend payable 3,000 2,500 10,100 10,000 65,000 Current tax liabilities Other payables Advance from Tilford Sales revenue 85,000 Other income 23,000 22,000 Accumulated depreciation - Motor vehicles - Furniture and fixtures 4,000 2,000 2,000 6,000 $513,800 $252,100 Debits $ 65,000 22,000 137,200 Cost of sales $ 53,500 Other expenses Investment in Sifton 27,000 Land 28,000 34,000 171,580 8,620 7,200 24,480 22,000 37,300 70,320 3,100 2,000 2,000 3,000 7,400 Motor vehicles Furniture and fixtures Inventory Other assets Income tax expense Interim dividend paid 4,000 Final dividend declared 10,000 Deferred tax assets 16,200 Advance to Sifton 10,000 $513,800 $252,100