Reference no: EM133030444

Question - Craft Ltd. held 80 percent of the outstanding common shares of Delta Corp. as at December 31, Year 12. In order to establish a closer relationship with Nonaffiliated Corporation, a major supplier to both Craft and Delta, all three companies agreed that Nonaffiliated would take an equity position in Delta. Accordingly, for a cash payment of $13.80 per share, Delta issued 12,250 additional ordinary shares to Nonaffiliated on December 31, Year 12. This was the last transaction that occurred on this date. Statements of financial position for the two companies just prior to this transaction were as follows.

Craft Ltd statement of financial position

Buildings and equipment (net) 748000

Investment in delta 442960

Inventory 188500

Accounts receivable 114000

Cash 83500

Total 1576960

Ordinary shares. 480000

Retained earnings 634000

Mortgage payable 303000

Accounts payable 159960

Total 1576960

Delta Corp statement of Financial Position

Buildings and Equipment 588000

Inventory 219000

Accounts Receivable 173600

Cash 69200

Total 1049800

Ordinary shares (note1) 250000

Retained Earnings 285575

Accrued liabilities 110000

Accounts payable 404225

Total 1049800

Note 1: 49,000 common shares

Additional information

Craft has used the equity method of accounting for its investment in Delta since it acquired its 80 percent interest in Delta in Year 2. At that time, the acquisition differential was entirely allocated to inventory and patent, which still exists but is not recorded on Delta's separate-entity books.

There were no unrealized intercompany asset profits as at December 31, Year 12.

Required - Prepare a consolidated statement of financial position as at December 31, Year 12. (Show all workings).