Question
Parent Inc. and Sub Inc. had the following balance sheets on July 31, 2019: Parent Inc Sub Inc Sub Inc (carrying value) (carrying value) (fair
Parent Inc. and Sub Inc. had the following balance sheets on July 31, 2019:
Parent Inc | Sub Inc | Sub Inc | |
(carrying value) | (carrying value) | (fair value) | |
Cash | $180,000 | $36,000 | $36,000 |
Accounts Receivable | $100,000 | $40,000 | $40,000 |
Inventory | $ 60,000 | $24,000 | $27,000 |
Plant and Equipment (net) | $200,000 | $80,000 | $93,000 |
Goodwill | $ - | $ 8,000 | |
Trademark | $ - | $12,000 | $15,000 |
Total Assets | $540,000 | $200,000 | |
Current Liabilities | $ 80,000 | $50,000 | $50,000 |
Bonds Payable | $320,000 | $20,000 | $24,000 |
Common Shares | $ 90,000 | $80,000 | |
Retained Earnings | $ 50,000 | $50,000 | |
Total Liabilities and Equity | $540,000 | $200,000 |
Assuming that Parent Inc acquires 80% of Sub Inc on August 1, 2019 for cash of $180,000, the assets section of Parent's consolidated balance sheet on the date of acquisition would total to what amount under the fair value enterprise method?
Assuming that Parent Inc acquires 80% of Sub Inc on August 1, 2019 for cash of $180,000, the liabilities section of Parent's consolidated balance sheet on the date of acquisition (August 1, 2019) would total to what amount under the fair value enterprise method?
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