Required:

a) Calculate the consolidated goodwill at the date of acquisition under the proprietary theory.

b) Prepare a consolidated statement of financial position at the date of acquisition under each of the following: i) Parent company extension theory i) Entity theory.

On December 31, Year 1. P Company purchased 80% of the outstanding shares of S Company for $7,900 cash. The statements of financial position of the two companies immediately after the acquisition transaction appear below. pany ny arrying Amount 9 rrying Amount Value $8,3007,000 air Plant and equipment (net) Investment in S Company Inventory Accounts receivable 7,900 6,660 6,150 4,500 2,5502,550 5,300 5,500 3,300 3,300 Ordinary shares Retained earnings Long-term liabilities Other current liabilities Accounts payable $12,0004,500 15,410 4,500 1,500 1,400 5,950 3,5003,500 3,300 3,300 2,2002,200 1019,4