Effective on August 1, Year 3, the shareholders of Robin Inc. accepted an offer from Ravinder...

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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 $1,040,000 in cash. Ravinder Corp.'s legal fees for investigating and drawing up the share purchase agreement amounted to $25,000. Required (a) Prepare the journal entries in the records of Ravinder Corp. to record the share acquisition and cost of legal fees. (b) Prepare a schedule to calculate and allocate the acquisition differential. Explain the rationale for the accounting treatment of the $100,000 attributed to the research project. Page 197 (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. 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 $1,040,000 in cash. Ravinder Corp.'s legal fees for investigating and drawing up the share purchase agreement amounted to $25,000. Required (a) Prepare the journal entries in the records of Ravinder Corp. to record the share acquisition and cost of legal fees. (b) Prepare a schedule to calculate and allocate the acquisition differential. Explain the rationale for the accounting treatment of the $100,000 attributed to the research project. Page 197 (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.