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The July 31, Year 3, balance sheets of two companies that are parties to a business combination are as follows: Ravinder Corp. Carrying Amount $ 1,601,800 1,331,800 (250,900) $ Current assets Plant and equipment Accumulated depreciation Patents-net Robin Inc. Carrying Fair Value Amount 420,900 $ 471,600 1,341,800 975,600 (501, 800) 73,800 1,260,900 $ 2,682,700 $ $ $ 253,800 385,800 Current liabilities Long-term debt Common shares Retained earnings 1,361,800 481,800 721,800 117,300 2,682,700 253,800 360,900 169,800 476,400 1,260,900 $ $ In addition to the assets identified above, Ravinder Corp. attributed a value of $101,800 to a major research project that Robin Inc. was working on. Robin Inc. feels that it is within a year of developing a pro #1(Alt P as state-of-the-art bio-medical device. If this device can ever be patented, it could be worth hundreds of thousands of dollars. Effective on August 1, Year 3, the shareholders of Robin Inc. accepted an offer from Ravinder Corp. to purchase 80% of their common shares for $1,112,000 in cash. Ravinder Corp.s legal fees for investigating and drawing up the share purchase agreement amounted to $25,900. (6) Prepare a schedule to calculate and allocate the acquisition differential. (Negativ $ 1,112,000 $ 1,390,000 Cost of 80% of Robin Inc. Implied value of 100% of Robin Inc. Carrying amount of Robin's Inc. net assets Assets $ 1,260,900 614,700 Liabilities 646,200 743,800 Acquisition differential Allocated: FV - CA $ $ Current assets Plant and equipment Research project Patents 50,700 85,800 101,800 73,800 24,900 Long-term debt 337,000 406,800 Goodwill $ (c) Prepare Ravinder Corp.'s consolidated balance sheet as at August 1, Year 3. Assume there were no transactions on this date other than the transactions described above. (Negative amounts should be indicated by a minus sign.) RAVINDER CORP. Consolidated Balance Sheet August 1, Year 3 Assets Current assets $ Plant and equipment Accumulated depreciation Patents-net Research project Goodwill 935,500 2,257,600 (250,900) 73,800 101,800 406,800 $ 3,524,600 Liabilities and Equity Current liabilities Long-term debt Common shares Retained earnings Non-controlling interest 1,615,600 867,600 721,800 91,400 278,000 $ 3,574,400 The July 31, Year 3, balance sheets of two companies that are parties to a business combination are as follows: Ravinder Corp. Carrying Amount $ 1,601,800 1,331,800 (250,900) $ Current assets Plant and equipment Accumulated depreciation Patents-net Robin Inc. Carrying Fair Value Amount 420,900 $ 471,600 1,341,800 975,600 (501, 800) 73,800 1,260,900 $ 2,682,700 $ $ $ 253,800 385,800 Current liabilities Long-term debt Common shares Retained earnings 1,361,800 481,800 721,800 117,300 2,682,700 253,800 360,900 169,800 476,400 1,260,900 $ $ In addition to the assets identified above, Ravinder Corp. attributed a value of $101,800 to a major research project that Robin Inc. was working on. Robin Inc. feels that it is within a year of developing a pro #1(Alt P as state-of-the-art bio-medical device. If this device can ever be patented, it could be worth hundreds of thousands of dollars. Effective on August 1, Year 3, the shareholders of Robin Inc. accepted an offer from Ravinder Corp. to purchase 80% of their common shares for $1,112,000 in cash. Ravinder Corp.s legal fees for investigating and drawing up the share purchase agreement amounted to $25,900. (6) Prepare a schedule to calculate and allocate the acquisition differential. (Negativ $ 1,112,000 $ 1,390,000 Cost of 80% of Robin Inc. Implied value of 100% of Robin Inc. Carrying amount of Robin's Inc. net assets Assets $ 1,260,900 614,700 Liabilities 646,200 743,800 Acquisition differential Allocated: FV - CA $ $ Current assets Plant and equipment Research project Patents 50,700 85,800 101,800 73,800 24,900 Long-term debt 337,000 406,800 Goodwill $ (c) Prepare Ravinder Corp.'s consolidated balance sheet as at August 1, Year 3. Assume there were no transactions on this date other than the transactions described above. (Negative amounts should be indicated by a minus sign.) RAVINDER CORP. Consolidated Balance Sheet August 1, Year 3 Assets Current assets $ Plant and equipment Accumulated depreciation Patents-net Research project Goodwill 935,500 2,257,600 (250,900) 73,800 101,800 406,800 $ 3,524,600 Liabilities and Equity Current liabilities Long-term debt Common shares Retained earnings Non-controlling interest 1,615,600 867,600 721,800 91,400 278,000 $ 3,574,400
