Purchase of Net Assets Parent Co. purchases the net assets of Subsidiary Co. for $1,000,000 by issuing $1,000,000 worth of its own common shares. Subsidiary Co. Balance Sheet Before Current Assets Cash Accounts Receivable, net Prepaid Deposits Inventory, net Total Current Assets Acquisition Carrying Value Fair Value 25,000 25,000 5,000 5,000 50,000 50,000 1,000,000 1,200,000 1,080,000 Long-term Assets Patent 100,000 Vehicles 350,000 250,000 250,000 Accumulated depreciation, vehicles 80,000 270,000 Total Long-term Assets 370,000 Total Assets 1,450,000 Current Liabilities Accounts payable and accruals 10,000 Deferred revenue 120,000 10,000 135,000 Total Current Liabilities 130,000 Long-term Liabilities Shareholder loan Bond payable Total Long-term liabilities Equity 500,000 100,000 500,000 120,000 600,000 Common shares 100 Shareholders' Equity 719,900 Total Equity 720,000 Total Liabilities and Equity 1,450,000 Column A Subsidiary Co. Balance Sheet After Acquisition Carrying Value 0 0