Big and Small Inc. had the following Statement of Financial Position on December 31, 201 and the associated fair values prior to acquisition; Additional information: 1) Prior to the acquisition, Big Inc. had 150,000 shares outstanding, while Small Inc. had 200,000 shares outstanding. 2) The market price of Big Inc.'s shares on December 31, 20x1 was $8.50 per share, and the price of Small Inc.'s shares was $3.15 per share. 3) Small Inc. has an unrecorded patent, with a fair value of $65,000. Case A Refer to the Statement of Financial Position information. After close of business on December 31, 20x1 Big Inc. acquired the net assets of Small Inc. by paying $100,000 cash and issuing 40,000 of its own shares. Big Inc. will also pay an additional sum of $200,000 to Small Inc. on December 31, 20x4. Use 8% as an appropriate discount rate. Big Inc. incurred $30,000 in legal fees to complete the transaction and $20,000 for stock issuance costs. The legal fees and stock issuance costs were paid for in cash. Required: Prepare the journal entry(ies) to record the business combination in the books of Big Inc. (7 marks) Case B Refer to the Statement of Financial Position information. Ignore the facts provided in Case A. After close of business on December 31,201 Big Inc. acquired 60% of the shares of Small Inc. by issuing 50,000 of its own shares. Assume that Big Inc. is the acquirer for consolidation purposes. Big Inc. incurred $30,000 in legal fees to complete the transaction and $25,000 for stock issuance costs. The legal fees and stock issuance costs were paid for in cash. Required: Determine the following balances to be reported on the Consolidated Statement of Financial Position under the Identifiable Net Assets approach at the date of acquisition (14 marks) (i) Goodwill ( 8 marks) (ii) Cash ( 2 marks) (iii) Common shares ( 2 marks) (iv) Retained earnings ( 1 mark) (v) Non-controlling interest (1 mark) Big and Small Inc. had the following Statement of Financial Position on December 31, 201 and the associated fair values prior to acquisition; Additional information: 1) Prior to the acquisition, Big Inc. had 150,000 shares outstanding, while Small Inc. had 200,000 shares outstanding. 2) The market price of Big Inc.'s shares on December 31, 20x1 was $8.50 per share, and the price of Small Inc.'s shares was $3.15 per share. 3) Small Inc. has an unrecorded patent, with a fair value of $65,000. Case A Refer to the Statement of Financial Position information. After close of business on December 31, 20x1 Big Inc. acquired the net assets of Small Inc. by paying $100,000 cash and issuing 40,000 of its own shares. Big Inc. will also pay an additional sum of $200,000 to Small Inc. on December 31, 20x4. Use 8% as an appropriate discount rate. Big Inc. incurred $30,000 in legal fees to complete the transaction and $20,000 for stock issuance costs. The legal fees and stock issuance costs were paid for in cash. Required: Prepare the journal entry(ies) to record the business combination in the books of Big Inc. (7 marks) Case B Refer to the Statement of Financial Position information. Ignore the facts provided in Case A. After close of business on December 31,201 Big Inc. acquired 60% of the shares of Small Inc. by issuing 50,000 of its own shares. Assume that Big Inc. is the acquirer for consolidation purposes. Big Inc. incurred $30,000 in legal fees to complete the transaction and $25,000 for stock issuance costs. The legal fees and stock issuance costs were paid for in cash. Required: Determine the following balances to be reported on the Consolidated Statement of Financial Position under the Identifiable Net Assets approach at the date of acquisition (14 marks) (i) Goodwill ( 8 marks) (ii) Cash ( 2 marks) (iii) Common shares ( 2 marks) (iv) Retained earnings ( 1 mark) (v) Non-controlling interest (1 mark)