G Company is considering the takeover of K Company whereby it will issue 6,600 common shares for all of the outstanding shares of K Company. K Company will become a wholly owned subsidiary of G Company. Prior to the acquisition, G Company had 18,000 shares outstanding, which were trading at $7.80 per share. The following information has been assembled:

		G Company						K Company
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Current assets	$	50,000		$	50,500		$	16,000		$	12,200
Plant assets (net)		66,000			76,000			26,000			38,000
	$	116,000					$	42,000
Current liabilities	$	20,600			20,600		$	5,600			5,600
Long-term debt		18,000			22,000			3,100			4,500
Common shares		43,000						16,000
Retained earnings		34,400						17,300
	$	116,000					$	42,000

Required:

(a) Prepare G Companys consolidated balance sheet immediately after the combination using the direct approach and accounting for the combination with

(i) The acquisition method

(ii) The new-entity method

(b) Calculate the current ratio and debt-to-equity ratio for G Company under both methods. (Round your answers to 2 decimal places.)

	New Entity Method		Acquisition Method
Current ratio
Debt-to-equity ratio

(c) Prepare G Companys consolidated balance sheet immediately after the combination using the worksheet approach and the acquisition method. (Leave no cells blank - be certain to enter "0" wherever required. Values in the first two columns and last column (the "parent", "subsidiary" and "consolidated" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Entry" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Omit $ sign in your response.)

Consolidated Financial Statement Working Paper
G Company
Consolidated Balance Sheet
				Entries
	G Company	K Company		Dr.		Cr.	Consolidated
Current assets	$	$		$		$	$
Plant assets (net)
Goodwill
Investment in K Company
Acquisition differential
	$	$					$
Current liabilities	$	$					$
Long-term debt
Common shares
Retained earnings
	$	$					$
			Total	$		$