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please help On December 31, Year 1, P Company purchased 80% of the outstanding shares of S Company for $8,480 cash. The statements of financial
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On December 31, Year 1, P Company purchased 80% of the outstanding shares of S Company for $8,480 cash. The statements of financial position of the two companies immediately after the acquisition transaction appear below. P Company's Carrying Amount $ Company Carrying Amount 10,000 8,480 Fair Value $9,000 $7,600 Plant and equipment (net) Investment in S Company Inventory Accounts receivable Cash 7,060 6,950 6,200 3,700 2,950 5,300 37,790 12,400 17,290 4,400 Ordinary shares Retained earnings Long-term liabilities Other current liabilities Accounts payable 5,700 3,700 2,950 $21,350 $4,900 6,250 3,900 3,700 2,600 $21,350 1,900 1,800 37,790 3,900 3,700 2,600 Required: (a) Calculate consolidated goodwill at the date of acquisition under the proportionate consolidation method. Consolidated goodwill (b) Prepare a consolidated statement of financial position in order of liquidity i.e starting with cash at the date of acquisition under each of the following: (i) Identifiable net assets method (ii) Fair value enterprise method (c) Calculate the current ratio and debt-to- equity ratio for P Company under the identifiable net assets (INA) method and the fair value enterprise (FVE) method. (Round "Current ratio" answers to 2 decimal places and "Debt to equity ratio" answers to 4 decimal places.) INAFVE Current ratio Debt to equity ratioStep by Step Solution
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