The following are the financial statements of Post Corporation and its subsidiary, Sage Company, as at December 31, Year 3:

Additional Information
€¢ Post purchased 70% of the outstanding shares of Sage on January 1, Year 1, at a cost of $63,000, and has used the cost method to account for its investment. On that date, Sage had accumulated depreciation of $10,000, retained earnings of $15,000, and fair values were equal to carrying amounts for all its net assets, except inventory (overvalued by $12,000).
€¢ In determining the purchase price, the management of Post noted that Sage, as lessee, leases a warehouse under an operating lease that has terms that are unfavourable relative to market terms. However, the lease agreement explicitly prohibits transfer of the lease (through either sale or sublease). An independent appraiser indicated that the fair value of this unfavourable lease agreement is $18,000. There were five years remaining on this lease on the date of acquisition.
€¢ The companies sell merchandise to each other at a gross profit rate of 25%.
€¢ The December 31, Year 2, inventory of Post contained purchases made from Sage amounting to $14,000. There were no intercompany purchases in the inventory of Sage on this date.
€¢ During Year 3 the following intercompany transactions took place:
€” Sage made a payment of $26,500 to Post for management fees, which was recorded under the category €œother expenses.€
€” Sage made sales of $90,000 to Post. The December 31, Year 3, inventory of
Post contained goods purchased from Sage amounting to $28,000.
€” Post made sales of $125,000 to Sage. The December 31, Year 3, inventory of
Sage contained goods purchased from Post amounting to $18,000.
€” On July 1, Year 3, Post borrowed $55,000 from Sage and signed a note bearing interest at 12% per annum. The interest on this note was paid on December 31, Year 3.
€” During the year, Sage sold land to Post and recorded a gain of $30,000 on
the transaction. This land is being held by Post on December 31, Year 3.
€¢ Goodwill impairment losses occurred as follows: Year 1, $2,600; Year 2, $460; Year 3, $1,530.
€¢ Post uses the equity method to account for its investment in Sage.
€¢ Both companies pay income tax at 40% on their taxable incomes.
Required:
(a) Prepare the following consolidated financial statements for Year 3:
(i) Income statement
(ii) Statement of financial position
(b) Calculate goodwill impairment loss and profit attributable to non-controlling interest for the year ended December 31, Year 3, under parent company extension theory.
(c) Calculate goodwill and non-controlling interest on the consolidated statement of financial position at December 31, Year 3, under parent company extension theory.

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STATEMENTS OF FINANCIAL POSITION December 31, Year 3 Post Sage $175,000 19,000 65,000 (229,400) 17,000) Land Plant and equipment Accumulated depreciation Investment in Sage Inventory Notes receivable Accounts receivable Cash 520,000 103,707 34,000 27,000 55,000 9,100 12,900 $632,707 $171,000 17,200 12,200 $100,000 50,000 81,000 Ordinary shares Retained earnings Notes payable Accounts payable 265,707 55,000 212,000 40,000 $632,707 $171,000 STATEMENTS OF PROFIT-Year 3 Post Sage Sales $900,000 $240,000 Management fee revenue Interest revenue 26,500 6,800 Investment income from Sage Gain on sale of land 1,479 30,000 276,800 162,000 Cost of goods sold Interest expense Other expenses Income tax expense 74,800 16,000 252,800 $107,979 24,000 927,979 540,000 20,000 180,000 80,000 820,000 Profit