On December 31^st. 2019, the X Company acquired 100% of the common shares of the Y Company in exchange for 100,000 of their common shares when the net book value of the Company was $676,000.The shares were trading at $7.20 per share on the date of the exchange.On this date also the inventory of Y had a fair value of $429,000, its land had a fair value of $182,000 and its plant and equipment had a fair value of $728,000.An inventory check of intangible assets resulted in an unidentifiable trademark being recognized at $50,000 on this date.

Costs of the acquisition are expected to be as follows:-

Cost of issuing shares.....................................................................$50,000

Professional fees................................................................................77,000

The balance sheets of the X Company and theY Company on December 30^th.2019, were as follows:-

X..................................................................Y

Cash......................................................................................$126,000...................................................$13,000

Accounts receivable..............................................................362,600.................................................... 91,000

Inventory.................................................................................234,000...................................................416,000

Land..........................................................................................182,000...................................................104,000

Plant and equipment..............................................................972,000...................................................804,000

Accumulated depreciation.....................................................(36,000)..................................................(50,000)

Goodwill....................................................................................234,000.....................................................10,000

TOTAL ASSETS..................................................................... $2,074,600.............................................$1,388,000

Current liabilities...................................................................300,000............................................... 208,000

Long-term debt......................................................................368,000.............................................. 504,000

Common shares..................................................................... 1,040,000.............................................. 780,000

Retained Earnings.................................................................... 366,600.................................................(104,000)

TOTAL LIABILITIES & OWNERS' EQUITY..............................$2,074,600..............................................$1,388,000

Required:-Using the acquisition method of consolidation, calculate:- (a) Consolidate Goodwill at date of acquisition (7 marks)

(b)The following items on the consolidated balance sheet at the date of acquisition

(i)Cash

(ii) Inventory

(iii) Land

(iv) Plant & Equipment

(v) Accumulated Depreciation

(vi) Goodwill

(1.5 marks for each of the above items)

(vii) Common Shares(2 marks)

(viii) Retained Earnings (2 marks)