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Problems 20 and 21 are based on the following information. The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation,

Problems 20 and 21 are based on the following information. The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:

BALANCE SHEETS

December 31, 2020

Patrick Sean

Cash $80,000 $60,000

Accounts receivable (net) $140,000 $25,000

Inventories $90,000 $50,000

Plant and equipment (net) $625,000 $280,000

Investment in Sean $460,000 $ -0-

Total assets $1,395,000 $415,000

Accounts payable $160,000 $95,000

Long-term debt $110,000 $30,000

Common stock ($10 par) $340,000 $50,000

Additional paid-in capital $10,000

Retained earnings $785,000 $230,000

Total liabilities and shareholders equity $1,395,000 $415,000

Additional Information:

  • On December 31, 2020, Patrick acquired 100 percent of Seans voting stock in exchange for $460,000.
  • At the acquisition date, the fair values of Seans assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Seans inventory were $25,000 more than their carrying amounts.

20. In the December 31, 2020, consolidated balance sheet of Patrick and its subsidiary, what amount of total assets should be reported?

  1. $1,375,000
  2. $1,395,000
  3. $1,520,000
  4. $1,980,000

21. In the December 31, 2020, consolidated balance sheet of Patrick and its subsidiary, what amount of total stockholders equity should be reported?

  1. $1,100,000
  2. $1,125,000
  3. $1,150,000
  4. $1,355,000

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