The summarized trial balances of Phase Limited and Step Limited as of December 31,
Year 5, are as follows (amounts in thousands):

Phase had acquired the investment in Step in three stages:

The January 1, Year 2, acquisition enabled Phase to elect 3 members to the
10-member board of directors of Step. The January 1, Year 4, acquisition did not
give Phase control over Step. Any difference between cost and the underlying
carrying amount for each acquisition is attributable equally to land and to pat-
ents, which are expected to produce benefits until December 31, Year 11. Step had
issued 20,000 shares on July 1, Year 1, the date of incorporation, and has neither
issued nor retired shares since that date. Other information follows:
€¢ Sale of depreciable assets (six-year remaining useful life), from Phase to Step,
on June 30, Year 5, at a gain of $60,000.
€¢ Intercompany sales:

€¢ Opening inventory of Phase contained merchandise purchased from Step for
$10,000. Company policy was for a 20% gross margin on intercompany sales.
Ending inventory of Phase contained merchandise purchased from Step for
$5,000. One-half of the goods sold intercompany during Year 5 had not been
paid for by year-end.
€¢ Assume a 40% tax rate.
Required:
Compute the following consolidated amounts as of December 31, Year 5:
(a) Patents
(b) Property, plant, and equipment
(c) Current assets (ignore deferred income taxes)
(d) Non-controlling interest on statement of financial position
(e) Retained earnings, beginning
(f) Cost of goods sold
(g) Profit attributable to Phase€™s shareholder€™s (statement not required)

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Phase S 540 257 173 80 610 190 $1,850 Step $298 Property, plant, and equipment Investment in Step Current assets Dividends declared Cost of goods sold Other expenses 89 260 $742 $ 400 360 Ordinary shares Retained earnings, beginning Liabilities Sales, gains, and other revenue $200 104 38 400 $742 1,002 $1,850 Date Jan. 1/Year 2 Jan. 1/Year 4 Jan. 1/Year 5 Shares 4,000 6,000 6,000 Cost $ 50,700 98,300 108,000 Step's retained earnings $28,000 69,000 104,000 Phase to Step Step to Phase Phase to Step Step to Phase $50,000 20,000 80,000 10,000 Year 4 Year 5