The balance sheets for Pip Ltd. and Squeak Inc. are shown as at January 1, 2019, the day that Pip acquired 100% of the outstanding shares of Squeak. At that date the fair value of the inventory and plant were respectively, $2,000 and $7,000 higher for Pip and $1,000 and $5,000 higher for Squeak, then their carrying amounts.

At what amount will the inventory and plant appear on the consolidated balance sheet prepared on January 1, 2019?

Multiple Choice

a.) Inventory - $39,000; Plant - $107,000

b.) Inventory - $38,000; Plant - $105,000

c.) Inventory - $40,000; Plant - $100,000

Cash & A/R Inventory Plant Pip Ltd. Speak Inc. $ 50,000 $ 26,000 30,000 7,000 70,000 30,000 $ 140,000 $63,000 $ 80,000 $33,000 25,000 12,500 35,000 17,500 $ 140,000 $63,000 Liabilities Common shares Retained earnings