Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The balance sheets of E Ltd. and J Ltd. on December 30, Year 6, were as follows: Cash and receivables Inventory Plant assets (net) Intangible
The balance sheets of E Ltd. and J Ltd. on December 30, Year 6, were as follows: Cash and receivables Inventory Plant assets (net) Intangible assets E Ltd. $ 96,150 57,300 228,600 24,150 $ 406, 200 $ 63,300 97,800 153,600 91,500 $ 406, 200 J Ltd. $ 19,800 9,150 70,800 6,300 $ 106,050 $ 30,100 45,200 46,600 (15,850) $ 106,050 Current liabilities Long-term debt Common shares Retained earnings (deficit) On December 31, Year 6, E Ltd. issued 483 shares, with a fair value of $40 each, for 70% of the outstanding shares of J Ltd. Costs involved in the acquisition, paid in cash, were as follows: Costs of arranging the acquisition Costs of issuing shares $ 2,530 1,660 $ 4,190 The carrying amounts of J Ltd.'s net assets were equal to fair values on this date except for the following: Plant assets Long-term debt Fair value $ 65, 150 40,600 E Ltd. was identified as the acquirer in the combination. Required: (a) Prepare the consolidated balance sheet of E Ltd. on December 31, Year 6, under the identifiable net assets method. Required: (a) Prepare the consolidated balance sheet of E Ltd. on December 31, Year 6, under the identifiable net assets method. > Answer is complete but not entirely correct. E Ltd. Consolidated Balance Sheet December 31, Year 6 Assets Cash and receivables s Inventory Plant assets Intangible assets Goodwill Xs OOOO 111,760 66,450 299,400 X 30,450 1,985 X $ 510,045 $ 158,430 x 105.990 X Liabilities and Equity Common shares Retained earnings Non-controlling interest Current liabilities Long-term debt ooOOO 9,225 X 93,400 143,000 X $ 510,045 (b) Prepare the consolidated balance sheet of E Ltd. on December 31, Year 6, under the fair value enterprise method. Answer is complete but not entirely correct. E Ltd. Consolidated Balance Sheet December 31, Year 6 Assets Cash and receivables Inventory Plant assets Intangible assets Goodwill x $ 111,760 66,450 293,750 30,450 2,720 X $ 505,130 $ Liabilities and Equity Common shares Retained earnings Non-controlling interest Current liabilities Long-term debt 158,430 % 105,990 X 8,910 X 93,400 138,400 $ 505,130
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started