On January 1, 2013 Paisley Ltd. Acquired 100% of the issued shares of Plaid Incorporated. The fair value of the consideration paid was measured at $460,000. At this date, records of Plaid Incorporated included the following information:

\begin{array}{ll}\text { Share Capital } & \$ 200,000 \\\text { Retained Eamings } & \$ 80,000 \\\text { Goodwill } & \$ 20,000\end{array}

As at January 1, 2013, all the identifiable assets and liabilities of Plaid were recorded in the subsidiary's books at fair value except for the following assets:

\begin{array} { l l l } & \text { Carrying Amount } & \text { Fair Value } \\ \text { Inventory } & \$ 60,000 & \$ 90,000 \\\text { Land } & \$ 100,000 & \$ 125,000\end{array}

The inventory was all sold by December 31, 2013. The land is still remaining with Plaid as at December 31, 2013. Goodwill has not been deemed to be impaired. The tax rate is 40%.
The summarized financial statements of both entities as at December 31, 2013 are shown below.
Required:.
Prepare the consolidated financial statements of Paisley Ltd. As at December 31, 2013.

\begin{array}{lll}&\text { Paisley Ltd. }&\text { Plaid Incorporated }\\\hline\text { Revenues } & \$ 950,000 & \$ 725,000 \\\text { Expenses } & \$ 430,000 & \$ 375,000 \\\text { Profit before tax } & \$ 520,000 & \$ 350,000 \\\text { Income tax expense } & \$ 200,000 & \$ 150,000 \\\text { Profit for the period } & \$ 320,000 & \$ 200,000 \\\text { Retained eamings } 1 / 1 / 2013 & \$ 150,000 & \$ 80,000 \\\text { Retained eamings } 12 / 31 / 2013 & \$ 470,000 & \$ 280,000 \\\text { Share capital } & \$ 300,000 & \$ 200,000\\\\\text { Deferred tax liabilities } & \$ 15,000 & \$ 10,000 \\\text { Other liabilities } & \$ 200,000 & \$ 175,000 \\\text { Total liabilities } & \$ 215,000 & \$ 185,000 \\\text { Total equity and liabilities } & \$ 985,000 & \$ 665,000 \\& & \\\text { Cash } & \$ 175,000 & \$ 90,000 \\\text { Inventory } & \$ 225,000 & \$ 110,000 \\\text { Financial assets } & \$ 40,000 & \$ 65,000 \\\text { Land } & - & \$ 100,000\\\text { Investment in Plaid Incorporated } & \$ 460,000 & - \\\text { Intangible assets } & \$ 85,000 & \$ 280,000 \\\text { Goodwill } & - & \$ 20,000 \\\text { Total assets } & \$ 985,000 & \$ 665,000\end{array}

When the Parent Has Previously Held Equity Interest in the Subsidiary

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