On January $2,$ Year $5,$ Road Ltd$.$ acquired $70\%$ of the outstanding voting shares of Runner Ltd$.$ The acquisition differential of $$560,000$ on that date was allocated in the following manner:

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$$Inventory$$170,000$Land$120,000$Plant and equipment$130,000$Estimated life $5$ yearsPatent$40,000$Estimated life $8$ yearsGoodwill$100,000$$$560,000$

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The Year $9$ income statements for the two companies were as follows:

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$$Road$$Runner$$Sales$$4,700,000$$$2,170,000$Intercompany investment income$205,800$Rental revenue$210,000$Total income$4,905,8002,380,000$Materials used in manufacturing$2,350,000870,000$Changes in work$-$in$-$progress and finished goods inventory$115,000(10,000)$Employee benefits$620,000550,000$Interest expense$320,000210,000$Depreciation$475,000280,000$Patent amortization$60,000$Rental expense$105,000$Income tax$370,000180,200$Total expenses$4,355,0002,140,200$Profit$$550,800$$$239,800$

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Additional Information

Runner regularly sells raw materials to Road. Intercompany sales in Year $9$ totalled $$490,000.$

Intercompany profits in the inventories of Road were as follows:

$$January $1,$ Year $9$$$257,000$December $31,$ Year $9110,000$

Road$$s entire rental expense relates to equipment rented from Runner.

A goodwill impairment loss of $$3,000$ occurred in Year $9.$

Retained earnings at December $31,$ Year $9,$ for Road and Runner were $$2,526,400$ and $$1,220,000,$ respectively.

Road uses the equity method to account for its investment, and uses income tax allocation at the rate of $40\%$ when it prepares consolidated statements.

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Required:

$($a$)$ Prepare a consolidated income statement for Year $9$ with expenses classified by nature. $($Input all amounts as positive number except for Change in work$-$in$-$progress and finished goods inventory that must be entered with appropriate sign. Omit $ sign in your response.$)$

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Road Ltd$.$Consolidated Income Statementfor the Year Ended December $31,$ Year $9$Sales$$$ Rental revenue$$Total income$$Materials used in manufacturing$$Change in work$-$in$-$progress and finished goods inventory$$Employee benefits$$Interest expense$$Depreciation$$Patent amortization$$Goodwill impairment loss$$Income tax$$Total expenses$$Profit$$$ Attributable to:$$Shareholders of Road$$Non$-$controlling interests$$$

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$($b$)$ Calculate consolidated retained earnings at December $31,$ Year $9.($Omit $ sign in your response.$)$

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Consolidated retained earnings$$$