On December $31,$ Year $1,$ P Company purchased $80\%$ of the outstanding shares of S Company for $$13,900$ cash.

The statements of financial position of the two companies immediately after the acquisition transaction appear below.

P Company S Company

Carrying Amount Carrying Amount Fair Value

Plant and equipment $($net$)$ $ $10,100$ $ $8,900$ $ $11,500$

Investment in S Company $13,900$

Inventory $7,1605,8006,400$

Accounts receivable $7,1503,8003,800$

Cash $5,5003,0503,050$

$ $43,810$ $ $21,550$

Ordinary shares $ $12,500$ $ $5,000$

Retained earnings $23,4106,050$

Long$-$term liabilities $4,0004,0004,000$

Other current liabilities $2,0003,8003,800$

Accounts payable $1,9002,7002,700$

$ $43,810$ $ $21,550$

Required:

$($a$)$ Calculate consolidated goodwill at the date of acquisition under the proportionate consolidation method. $($Omit $ sign in your response.$)$

Consolidated goodwill $ On December $31,$ Year $1,$ P Company purchased $80\%$ of the outstanding shares of S Company for $$13,900$ cash.

The statements of financial position of the two companles immediately after the acquisition transaction appear below.

Required:

$($a$)$ Calculate consolidated goodwill at the date of acquisition under the proportionate consolidation method. $($Omit $ sign in your

response.$)$

Consolldated goodwill

$

$11400$

$($b$)$ Prepare a consolidated statement of financial position at the date of acquisition under each of the following:

$($I$)$ Identifiable net assets method $($II$)$ Fair value enterprise method

$($c$)$ Calculate the current ratio and debt$-$to$-$equity ratio for $P$ Company under the identifiable net assets $($INA$)$ method and the fair value enterprise $($FVE$)$ method. $($Round "Current ratio" answers to $2$ decimal places and "Debt to equity ratio" answers to $4$ decimal places.$)$

$($b$)$ Prepare a consolidated statement of financial position at the date of acquisition under each of the following:

$($i$)$ Identifiable net assets method

$($ii$)$ Fair value enterprise method

$($c$)$ Calculate the current ratio and debt$-$to$-$equity ratio for P Company under the identifiable net assets $($INA$)$ method and the fair value enterprise $($FVE$)$ method. $($Round "Current ratio" answers to $2$ decimal places and "Debt to equity ratio" answers to $4$ decimal places.$)$

INA FVE

Current ratio

Debt to equity ratio