Problem 1 (20 Points) On January 1, 20x8, Parker Company acquired all of the outstanding stock of Sharp PLC, a British Company, for $350,000. Sharp's net assets on the date of acquisition were 250,000 pounds (S). On January 1, 20x8, the book and fair values of the Sharp's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and trademarks. The fair value of Sharp's property, plant, and equipment exceeded its book value by $25,000. The remaining useful life of Sharp's equipment at January 1, 20x8, was 10 years. The remainder of the differential was attributable to a trademark having an estimated useful life of 5 years. Sharp's trial balance on December 20x8, in pounds, follows: Credits Debits 70,000 100,000 120,000 330,000 es of the nd einment Cash Accounts Receivable (net) Inventory Property, Plant, and Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total 120,000 110,000 90,000 100,000 150,000 420,000 270,000 60,000 30,000 10,000 990,000 990,000 prosty Additional Information 1. Sharp uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20x7, and ending inventory was acquired on December 26, 20x8. Purchases of $300,000 were made evenly throughout 20x8. 2. Sharp acquired all of its property, plant, and equipment on March 1, 20x6, and uses straight-line depreciation 3. Sharp's sales were made evenly throughout 20x8, and its operating expenses were incurred evenly throughout 20x8. 4. The dividends were declared and paid on November 1, 20x8 3. Parker's income from its own operations was $150,000 for 20x8, and its total stockholders' equity on January 1, 20x8. was $1.000.000. Parker declared $50,000 of dividends during 20x8. 6. Exchange rates were as follows: Problem 1 (20 Points) On January 1, 20x8, Parker Company acquired all of the outstanding stock of Sharp PLC, a British Company, for $350,000. Sharp's net assets on the date of acquisition were 250,000 pounds (S). On January 1, 20x8, the book and fair values of the Sharp's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and trademarks. The fair value of Sharp's property, plant, and equipment exceeded its book value by $25,000. The remaining useful life of Sharp's equipment at January 1, 20x8, was 10 years. The remainder of the differential was attributable to a trademark having an estimated useful life of 5 years. Sharp's trial balance on December 20x8, in pounds, follows: Credits Debits 70,000 100,000 120,000 330,000 es of the nd einment Cash Accounts Receivable (net) Inventory Property, Plant, and Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total 120,000 110,000 90,000 100,000 150,000 420,000 270,000 60,000 30,000 10,000 990,000 990,000 prosty Additional Information 1. Sharp uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20x7, and ending inventory was acquired on December 26, 20x8. Purchases of $300,000 were made evenly throughout 20x8. 2. Sharp acquired all of its property, plant, and equipment on March 1, 20x6, and uses straight-line depreciation 3. Sharp's sales were made evenly throughout 20x8, and its operating expenses were incurred evenly throughout 20x8. 4. The dividends were declared and paid on November 1, 20x8 3. Parker's income from its own operations was $150,000 for 20x8, and its total stockholders' equity on January 1, 20x8. was $1.000.000. Parker declared $50,000 of dividends during 20x8. 6. Exchange rates were as follows