On February 1, 2024, Ivanhoe Company purchased 95% of the outstanding common stock of Debra Company and 85% of the outstanding common stock of Gary Company. Immediately before the two acquisitions, balance sheets of the three companies were as follows: Ivanhoe Debra Gary Cash $165,000 $41,000 $15,800 Accounts receivable 34,000 34,000 30,000 Notes receivable 18,500 -0- Merchandise inventory 109,000 42,000 13,000 Prepaid insurance 13,800 2,200 500 Advances to Debra Company 13,000 Advances to Gary Company 4,900 Land 260,000 45,000 18,900 Buildings (net) 106,000 25,000 16,500 Equipment (net) 30,000 14,400 3,800 Total $754,200 $203,600 $98,500 Accounts payable $28,500 $22,000 $11,200 Income taxes payable 32,300 10,700 -0- Notes payable -0- 5,000 11,200 Bonds payable 100,000 -0- -0- Common stock, $10 par value 300,000 144,000 45,000 Other contributed capital 190,000 13,800 39,000 Retained earnings (deficit) 103,400 8,100 (7,900) Total $754,200 $203,600 $98,500 The following additional information is relevant. 1. 2. 3. 4. 5. 6. One week before the acquisitions, Ivanhoe Company had advanced $13,000 to Debra Company and $4,900 to Gary Company. Debra Company recorded an increase to Accounts Payable for its advance, but Gary Company had not recorded the transaction. On the date of acquisition, Ivanhoe Company owed Debra Company $12,900 for purchases on account, and Gary Company owed Ivanhoe Company $3,000 and Debra Company $5,700 for such purchases. The goods purchased had all been sold to outside parties prior to acquisition. Ivanhoe Company exchanged 13,300 shares of its common stock with a fair value of $12 per share for 95% of the outstanding common stock of Debra Company. In addition, stock issue fees of $5,000 were paid in cash. The acquisition was accounted for as a purchase. Ivanhoe Company paid $57,800 cash for the 85% interest in Gary Company. 2,500 dollars of Debra Company's notes payable and $10,200 of Gary Company's notes payable were payable to Ivanhoe Company. Assume that for Debra, any difference between book value and the value implied by the purchase price relates to subsidiary land. However, for Gary, assume that any excess of book value over the value implied by the purchase price is due to overvalued buildings. Company Company Company Cash $102,200 $41,000 $15,900 $ Account Receivable 34,000 34,000 30,000 Notes Receivable 18,500 Merchandise Inventory 109,000 42,000 13,000 Prepaid Insurance 13,800 2,200 500 Investment in Debra Company 159,600 Investment in Gary Company 57,800 Difference between Implied and Book Value Advances to Debra Company Advances to Gary Company Land 13,000 4,900 260,000 45,000 18,900 Buildings (net) 106,000 25,000 16,500 Equipment (net) 30,000 14,400 3,900 Total Assets $908,800 $203,600 $98,500 Accounts Payable 28,500 22,000 11,200 Income Taxes Payable 32,300 10,700 Notes Payable 5,000 11,200 Bonds Payable 100,000 Common Stock: Ivanhoe Company 433,000 Debra Company Gary Company Other Contributed Capital: Ivanhoe Company 211,600 Debra Company Gary Company Retained Earnings Ivanhoe Company 103,400 Debra Company Gary Company Noncontrolling Interest 144,000 45,000 13,800 39,000 8,100 (7,900) Total Liabilities and Equity $908,800 $203,600 $98,500 $ Dr. Eliminations Noncontrolling Consolidated Cr. Interest Balance $