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Par Inc. purchased 70% of the outstanding voting shares of Sub Inc. for $700000 on July 1, 2020. On that date, Sub Inc. had common

Par Inc. purchased 70% of the outstanding voting shares of Sub Inc. for $700000 on July 1, 2020. On that date, Sub Inc. had common shares and retained earnings worth $410,000 and $170,000, respectively. The Equipment had a remaining useful life of 5 years from the date of acquisition. Sub's bonds mature on July 1, 2025. The inventory was sold in the year following the acquisition. Both companies use straight line amortization, and no salvage value is assumed for assets. Par Inc. and Sub Inc. declared and paid $10,000 and $5,000 in dividends, respectively during the year. Par Inc. uses the Fair Value Enterprise Method to value the non-controlling interest in Sub Inc. on the acquisition date. The balance sheets of both companies, as well as Sub's fair values immediately following the acquisition are shown below:

Par Inc.

Sub Inc.

Sub Inc.

(carrying value)

(carrying value)

(fair value)

Cash

$600,000

$515,000

$515,000

Accounts Receivable

$140,000

$85,000

$85,000

Inventory

$60,000

$45,000

$60,000

Investment in Sub Inc.

$700,000

Equipment (net)

$50,000

$180,000

$185,000

Land

$115,000

$200,000

Total Assets

$1,550,000

$940,000

Current Liabilities

$100,000

$280,000

$280,000

Bonds Payable

$160,000

$80,000

$60,000

Common Shares

$800,000

$410,000

Retained Earnings

$490,000

$170,000

Total Liabilities and Equity

$1,550,000

$940,000

The following are the financial statements for both companies for the fiscal year ended June 30, 2021:

Income Statements

Sales

$800,000

$300,000

Investment Revenue

$21,000

Less: Expenses:

Cost of Goods Sold

$240,000

$180,000

Depreciation

$10,000

$20,000

Interest Expense

$12,000

$40,000

Other Expenses

$8,000

$10,000

Net Income

$551,000

$50,000

Retained Earnings Statements

Balance, July 1, 2020

$490,000

$170,000

Net Income

$551,000

$50,000

Dividends

$(10,000)

$(5,000)

Balance, June 30, 2021

$1,031,000

$215,000

Balance Sheets

Par Inc.

Sub Inc.

Cash

$647,500

$665,000

Accounts Receivable

$250,000

$35,000

Investment in Sub

$717,500

Inventory

$90,000

$45,000

Equipment (net)

$750,000

$170,000

Land

$115,000

Total Assets

$2,455,000

$1,030,000

Current Liabilities

$464,000

$325,000

Bonds Payable

$160,000

$80,000

Common Shares

$800,000

$410,000

Retained Earnings

$1,031,000

$215,000

Total Liabilities and Equity

$2,455,000

$1,030,000

Both companies use a FIFO system, and Sub's entire inventory on the date of acquisition was sold during the following year. During 2020, Sub Inc. borrowed $10,000 in cash from Par Inc. interest free to finance its operations. The amount remains unpaid as of June 30, 2021. The Par uses the Cost Method to account for its investment in Sub Inc. Corp.

Prepare a consolidated balance sheet for Par Inc. as at June 30, 2021.

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