Chapter 4 assignment

The balance sheets of Percy Corp. and Saltz Lid. on December 31, Year 10, are shown below: Percy Saltz Cash $ 203, 600 $ 4,900 Accounts receivable 51, 800 15 , 800 Inventory 62 , 700 45 , 600 Plant 484, 000 197 , 400 Accumulated amortization (134, 000) (91,800) Trademarks (net ) 15 , 800 $ 668, 100 $ 187 , 700 Current liabilities $ 103, 600 21 , 800 Long-term debt 165, 400 43 , 600 Common shares 221, 800 61 ,800 Retained earnings 177, 300 60, 500 $ 668, 100 $ 187 , 700 The fair values of the identifiable net assets of Saltz Lid. on December 31, Year 10, were as follows: Cash $ 4,900 Accounts receivable 15 , 800 Inventory 53 , 800 Plant 129 , 000 Trademarks 31, 600 235, 100 Current liabilities $ 21, 800 Long-term debt 39 , 800 61 , 600 Net assets $ 173 , 500 In addition to the assets identified above, Saltz owned a taxi licence in the City of Moose Jaw. This licence expires in nine years. These licences are selling in the open market at approximately $46,500. On January 1, Year 11, Percy Corp paid $177,000 in cash to acquire 7,000 (70%) of the common shares of Saltz Lid. Saltz's shares were trading for $22 per share just after the acquisition by Percy.