The balance sheets of A Ltd. and B Ltd. on December 30, Year 6, are as follows: 

On December 31, Year 6, A issued 150 common shares for all 60 outstanding common shares of B. The fair value of each of B’s common shares was $40 on this date. 

Required 

(a) Determine which shareholder group controls the consolidated entity and explain why this share issue most likely occurred. 

(b) Prepare the consolidated balance sheet of A Ltd. on December 31, Year 6.

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Current assets Noncurrent assets Current liabilities Long-term debt Common shares-100 issued Common shares-60 issued Retained earnings Carrying Amount $ 300 1,500 $1,800 $ 400 300 400 A Ltd. 700 $1,800 Fair Value $300 1,700 400 300 Carrying Amount $1,000 2,700 $3,700 $ 900 800 600 1,400 $3,700 B Ltd. Fair Value $1,000 2,800 900 800