On January 2, 20X5, Playful Inc. purchased 60% of the outstanding common shares of Serious Ltd. for $7,200,000.

Serious€™s condensed statement of financial position at that time was as follows:

The fair value of Serious€™s assets was the same as their carrying value except for capital assets, which had a fair value of $22,000,000. The capital assets have a remaining useful life of 15 years. Goodwill on the purchase is tested for impairment on an annual basis.

On October 1, 20X5, Playful purchased 20,000 of Serious€™s preferred shares at $35 per share. There were no dividend arrearages. Serious declared the fourth-quarter preferred dividend on December 15, 20X5, payable on January 15, 20X6, to holders of record on December 30, 20X5.

The condensed statements of financial position for both Playful and Serious were as follows on December 31, 20X5:

Required

Prepare a consolidated statement of financial position for Playful Inc. at December 31, 20X5.

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Current assets Capital assets $ 8,000,000 19,000,000 $27,000,000 Current liabilities Long-term liabilities Shareholders' equity: Common shares (100,000, no par) Preferred shares (100,000, no par, $4 dividend, Callable at $45; cumulative and non-voting) Retained earnings 10,000,000 $2,500,000 4,200,000 5,300,000 12,000,000 $27,000,000 Playful Inc. Serious Ltd. $ 7,000,000 Current assets $12,000,000 Capital assets 20,000,000 22,000,000 Investments (at cost) 7,900,000 $39,900,000 $29,000,000 Current liabilities $10,000,000 $ 6,000,000 Long-term liabilities Shareholders' equity: 5,000,000 10,000,000 Common shares 8,200,000 2,500,000 Preferred shares 4,200,000 Retained earnings 16,700,000 6,300,000 $39,900,000 $29,000,000