On December 31. Year 1. P Company purchased 90% of the outstanding shares of Company for $8,100 cash. The statements of financial position of the two companies immediately after the acquisition transaction appear below. Company 5 Company Carrying Carrying For Amount Amount Value Plant and equipoant (net) $9,500 57,200 $ 6,300 Investment in s Company 3.100 Inventory 6,560 5,300 5,600 Accounts receivable 5.950 3,200 3,200 Cash 4.300 2.450 2,450 $1,410 $1,150 Ordinary shares $ 11,900 $4,400 Retained earnings 15,410 5,050 Long term liabilities 4,400 3,400 Other current liabilities 1.000 ),200 1,200 Accounts payable 100 2.100 $ 34,410 $13,150 Required: (a) Prepare a consolidated statement of financial position in order of liquidity le starting with cash at the date of acquisition under each of the following (i) Identifiable net assets method P Company Consolidated Statement of financial position December 31, Year 1 Assets Cash Accounts receivable inventory Plant and equipment Goodwill 6,505 8,830 11 600 15,170 $ 42,105 Liabilities Accounts payable Other current liabilities Long-term liabilities 3,190 4,280 7,460 $ 14,930 Total liabilities Shareholders' equity Ordinary shares Retained earnings $ 11,900 (ii) Fair value enterprise method P Company Consolidated Statement of financial position December 31, Year 1 Assets Cash Accounts receivable inventory Plant and equipment Goodwill $ 0 Liabilities (Accounts payable Other current liabilities Long-term liabilities $ 0 Total liabilities Shareholders' equity Ordinary shares Retained earnings 1 Other current liabilities Long-term liabilities $ 0 Total liabilities Shareholders' equity Ordinary shares Retained earings Non-controlling interest 0 0 $ (b) Calculate the current ratio and debt-to-equity ratio for P Company under the identifiable net assets (INA) method and the falt value enterpelse (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 On December 31. Year 1. P Company purchased 90% of the outstanding shares of Company for $8,100 cash. The statements of financial position of the two companies immediately after the acquisition transaction appear below. Company 5 Company Carrying Carrying For Amount Amount Value Plant and equipoant (net) $9,500 57,200 $ 6,300 Investment in s Company 3.100 Inventory 6,560 5,300 5,600 Accounts receivable 5.950 3,200 3,200 Cash 4.300 2.450 2,450 $1,410 $1,150 Ordinary shares $ 11,900 $4,400 Retained earnings 15,410 5,050 Long term liabilities 4,400 3,400 Other current liabilities 1.000 ),200 1,200 Accounts payable 100 2.100 $ 34,410 $13,150 Required: (a) Prepare a consolidated statement of financial position in order of liquidity le starting with cash at the date of acquisition under each of the following (i) Identifiable net assets method P Company Consolidated Statement of financial position December 31, Year 1 Assets Cash Accounts receivable inventory Plant and equipment Goodwill 6,505 8,830 11 600 15,170 $ 42,105 Liabilities Accounts payable Other current liabilities Long-term liabilities 3,190 4,280 7,460 $ 14,930 Total liabilities Shareholders' equity Ordinary shares Retained earnings $ 11,900 (ii) Fair value enterprise method P Company Consolidated Statement of financial position December 31, Year 1 Assets Cash Accounts receivable inventory Plant and equipment Goodwill $ 0 Liabilities (Accounts payable Other current liabilities Long-term liabilities $ 0 Total liabilities Shareholders' equity Ordinary shares Retained earnings 1 Other current liabilities Long-term liabilities $ 0 Total liabilities Shareholders' equity Ordinary shares Retained earings Non-controlling interest 0 0 $ (b) Calculate the current ratio and debt-to-equity ratio for P Company under the identifiable net assets (INA) method and the falt value enterpelse (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
