On January 1, 2011 Glass Inc. acquired 80% of the share capital of Crystal Ltd. For $400,000. At this date, the equity of Crystal consisted of:
Share capital: $200,000
Retained earnings: $75,000
At January 1, 2011 all of Crystal's identifiable assets and liabilities were recorded at fair value except for the following:
Equipment (cost

\$ 150,000

)

\quad

Carrying amount:

\$ 80,000

Fair value:

\$ 90,000

Land

\quad

\quad

\quad

\quad

\quad

\quad

\quad

\quad

Carrying amount:

\$ 40,000

Fair V alue:

\$ 80,000

The equipment had a further useful life of 5 years. The land is still on hand. Glass uses the partial goodwill method.
Financial information for the two companies at December 31, 2013 is as follows:
$On January 1, 2011 Glass Inc. acquired 80% of the share capital of Crystal Ltd. For $400,000. At this date, the equity of Crystal consisted of: Share capital: $200,000 Retained earnings: $75,000 At January 1, 2011 all of Crystal's identifiable assets and liabilities were recorded at fair value except for the following: Equipment (cost \$ 150,000 ) \quad Carrying amount: \$ 80,000 Fair value: \$ 90,000 Land \quad \quad \quad \quad \quad \quad \quad \quad Carrying amount: \$ 40,000 Fair V alue: \$ 80,000 The equipment had a further useful life of 5 years. The land is still on hand. Glass uses the partial goodwill method. Financial information for the two companies at December 31, 2013 is as follows: Additional information: 1. During 2012, Crystal sold some inventory to Glass for $10,000. This inventory had originally cost Crystal $4,000. At December 31, 2012, 20% of these remained unsold by Glass. 2. The ending inventory of 2013, of Glass, included inventory sold to it by Crystal at a profit of $4,000 before tax. This had cost Crystal $15,000. 3. The tax rate is 30%. 4. Glass's share capital has always been $100,000. 5. On January 1, 2014, Glass sold 10% of its ownership in Crystal so that it now owns 70%. They received $30,000 for the shares. Required: (a)Prepare the consolidated statement of comprehensive income and statement of changes in equity at December 31, 2013. (b)Calculate the effect on consolidated equity in 2014 from the sale of the shares.$ Additional information:
1. During 2012, Crystal sold some inventory to Glass for $10,000. This inventory had originally cost Crystal $4,000. At December 31, 2012, 20% of these remained unsold by Glass.
2. The ending inventory of 2013, of Glass, included inventory sold to it by Crystal at a profit of $4,000 before tax. This had cost Crystal $15,000.
3. The tax rate is 30%.
4. Glass's share capital has always been $100,000.
5. On January 1, 2014, Glass sold 10% of its ownership in Crystal so that it now owns 70%. They received $30,000 for the shares.
Required:
(a)Prepare the consolidated statement of comprehensive income and statement of changes in equity at December 31, 2013.
(b)Calculate the effect on consolidated equity in 2014 from the sale of the shares.

Manuel Ltd

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