Course Name: Advanced Financial Accounting , no hand writing or pictures , be clear and explain your answers

A. ABC Corp. paid SR 3,500,000,000 in cash for Oraby Inc. and that the estimated fair market values of Subsidiary assets, liabilities, and equity accounts are as follows as of December 31 ,2020 . ? (1.0 mark)

Title	Fair value in SR
Accounts Receivable	1000,000
Inventory	500,000
PP&E net of accumulated depreciation )	1500,000
Liabilities	500,000
Common Stock	300,000
Retained Earnings	200,000
Additional Paid-in Capital	2,000,000

Required: calculate the goodwill

B. ABC Corporation created Oraby Corporation with a transfer of SR 600 cash equals the book value of SR 500 common stock and SR 100 retained earnings, During Oraby Corporations first year of operations; it generated net income of SR 100 and paid dividends of SR 40. (1.0 mark)

Required:

1. What is the balance in the Investment in Sub account on Parents books at the end of year using the equity method?

2. Pass the basic elimination entry

Answer: