Fair Value LO2 The July 31, Year 3. balance sheets of two companies that are parties to a business combination are as follows: Ravinder Corp Robin Inc. Carrying Amount Carrying Amount Current assets $1,600,000 $ 420,000 Plant and equipment 1.330.000 1.340,000 Accumulated depreciation (250,000) (500,000) Patents (net) $2.680,000 $1.260,000 $468.000 972.000 72.000 Current liabilities $1.360,000 $ 252,000 252.000 480,000 Long-term debt 480,000 360,000 384.000 Common shares 720.000 168,000 Retained earnings 120,000 $2.680,000 $1.260.000 In addition to the assets identified above, Ravinder Corp. attributed a value of $100,000 to a major research project that Robin Inc. was working on. Robin Inc. feels that it is within a year of developing a prototype for a 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 $1,040,000 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. (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