On January 1, 2012 Finn Ltd. Acquired 75% of the shares of Ewe Corporation for $10 per share in cash. The equity of Ewe as at that date was:

\begin{array}{lll}\text { Share capital-20,000 shares }&\$ 20,000 \\\text { Retained earnings}&\$ 50,000\\\end{array}

Finn had previously acquired 25% of the shares of Ewe for $10,000. The fair value of this investment as at January 1, 2012 was $50,000.
At the acquisition date all of the identifiable assets and liabilities of Ewe were recorded at fair value except for a plant and inventory, whose carrying amounts were $15,000 and $5,000 respectively less than their fair value. All of the inventory was subsequently sold during 2012 and the plant had a remaining useful life at the acquisition date of 5 years. The tax rate is 40%.
Ewe had been actively researching a new process, which is part of the reason why Finn acquired the remaining outstanding shares of Ewe. Finn estimated the value of this intangible to be $10,000 and that it would have an indefinite useful life.
Required: Prepare the acquisition analysis and the consolidation adjustments of Finn and Ewe as at December 31, 2013.

Which of the Following Statements Is True Regarding the Consolidation

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