On January 1, 2013, Sienna acquired all the shares of Danon for $160,000. The financial statements of the two entities at December 31, 2013, contained the following information:

Additional information:
1. At January 1, 2013, all identifi able assets and liabilities of Danon were recorded at fair value except for inventory, for which the fair value was $1,000 greater than the carrying amount. This inventory was all sold by December 31, 2013. At January 1, 2013, Danon had research and development outlays that it had expensed as incurred. Sienna measured the fair value of the in-process research and development at $8,000. By December 31, 2013, it was assessed that $2,000 of this was not recoverable. At January 1, 2013, Danon had reported a contingent liability relating to a guarantee that was considered to have a fair value of $7,000. This liability still existed at December 31, 2013. At January 1, 2013, Danon had not recorded any goodwill.
2. The bonds were issued by Danon at par value on January 1, 2012, and are redeemable on December 31, 2016. Sienna acquired its holding ($60,000) of these bonds when Danon initially issued them. All interest has been paid and refl ected in the records of both entities.
3. During 2013, Sienna sold inventory to Danon for $40,000, at a markup of cost plus 25%. At December 31, 2013, $10,000 worth of inventory was still held by Danon.
4. On June 30, 2013, Danon sold land to Sienna. Sienna paid $30,000 for this land, with Danon having a cost of $24,000.
5. The Other Components of Equity account relates to fi nancial assets, for which an election under IFRS 9 was taken. For 2013, Sienna recorded an increase in these assets of $3,000, and Danon recorded a decrease of $2,000.

6. The income tax rate is 40%.

Required
Prepare the consolidated fi nancial statements for Sienna and its subsidiary for the year ended December 31, 2013.

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Sienna Danon $234,800 $190,000 Sales revenue Dividend revenue 17,000 6,600 Other income 10,000 200,000 258,400 (120,000) (20,000) Cost of sales (123,000) (34,600) Other expenses (157,600) (140,000) Profit before income tax 100,800 (32,000) 60,000 (20,000) Net income Profit for the year Retained earnings (1/1/13) 68,800 76,000 40,000 32,000 Total available for appropriation 144,800 72,000 Interim dividend paid (34,000) (16,000) (9,800) (7,200) Dividend declared (50,000) (17,000) $ 94,800 $ 55,000 Retained earnings (31/12/13) Current assets $ 1,000 27,000 (500) 20,000 48,000 Cash 40 Receivables 12,100 (300) 10,000 47,000 Allowance for doubtful accounts Financial assets Inventory Total current assets 95,500 68,840 Non-current assets Plant and machinery Accumulated depreciation 100,000 (40,000) 99,300 60,000 160,000 70,000 (26,000) 190,000 Land Bonds in Danon Investment in Danon Total non-current assets 379,300 234,000 Total assets 474,800 302,840 Current liabilities 7,200 8,800 14,840 10,000 Dividend payable 16,000 12,000 Provisions Bank overdraft Current tax liabilities 11,000 Total current liabilities 39,000 40,840 Non-current liabilities 5% mortgage bonds Deferred tax liabilities 80,000 5,000 13,000 Total non-current liabilities 13,000 85,000 Total liabilities 52,000 125, Net assets $422,800 $177,000 Equity Share capital Retained earnings Other components of equity $320,000 94,800 $120,000 55,000 8,000 2,000 Total equity $422,800 $177,000