Part B: Two entities had the following balance sheet accounts as of December 31, 20X1 (in millions): A B A B Cash + other assets $900 $360 Liabilities Stockholders' equity $250 $650 $60 $300 On December 31, 20X1. Company A purchased all the shares of B for $540 million. The equipment acquired through the acquisition had book value of $120 million and fair value of $320 million. The book and fair value of other assets and liabilities are the same. For 20X2. Company B's revenues and expenses were $190 and $120 million, respectively, and Company A's revenues and experbes on its other operations (that is, excluding B) were $290 and $180 million, respectively. 1. Prepare a consolidated balance sheet immediately after the acquisition. (Use balance sheet equation format.) 2. What is the net income of the consolidated entity for 20X2 given that the equipment had remaining useful life of four years and straight line depreciation method is used? Assume zero taxes. 79 80 81 Part Llabilities Accounts Payable SE Shareholders' Equity Goodwill B2 Question Part B-1 (Consolidated Balancesheet) 83 Assets Cash + Other 86 Assets Investments 85 A (12/31/X1) 86 A acquire B for 540m 87 A(12/31/XI) after acquisition 88 B (12/31/XI) 89 Intercompany Elimination 90 Consolidated B/S 91 92 93 Question Part-2 (Net Income) 94 95