The balance sheets of Percy Corp. and Saltz Ltd. on December 31, Year 10, are shown...
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The balance sheets of Percy Corp. and Saltz Ltd. on December 31, Year 10, are shown below: Cash Accounts receivable Inventory Plant Accumulated amortization Trademarks-net Percy $200,000 Saltz $ 4,000 50,000 14,000 60,000 42,000 475,000 (125,000) 192,000 (90,000) Current liabilities Long-term debt Common shares Retained earnings $660,000 $100,000 160,000 14,000 $176,000 $ 20,000 40,000 220,000 60,000 180,000 $660,000 56,000 $176,000 The fair values of the identifiable net assets of Saltz Ltd. on December 31, Year 10, were as follows: Cash Accounts receivable Inventory Plant Trademarks Current liabilities Long-term debt Net assets $ 4,000 14,000 52,000 120,000 28,000 218,000 $20,000 38,000 58,000 $160,000 In addition to the assets identified above, Saltz owned a taxi licence in the City of Moose Jaw. This licence expires in nine years. These licences are selling in the open market at approximately $40,000. On January 1, Year 11, Percy Corp paid $175,000 in cash to acquire 7,000 (70%) of the common shares of Saltz Ltd. Saltz's shares were trading for $20 per share just after the acquisition by Percy. Required $21 Prepare the consolidated balance sheet on January 1, Year 11. a. under the entity theory b. under the parent company extension theory The balance sheets of Percy Corp. and Saltz Ltd. on December 31, Year 10, are shown below: Cash Accounts receivable Inventory Plant Accumulated amortization Trademarks-net Percy $200,000 Saltz $ 4,000 50,000 14,000 60,000 42,000 475,000 (125,000) 192,000 (90,000) Current liabilities Long-term debt Common shares Retained earnings $660,000 $100,000 160,000 14,000 $176,000 $ 20,000 40,000 220,000 60,000 180,000 $660,000 56,000 $176,000 The fair values of the identifiable net assets of Saltz Ltd. on December 31, Year 10, were as follows: Cash Accounts receivable Inventory Plant Trademarks Current liabilities Long-term debt Net assets $ 4,000 14,000 52,000 120,000 28,000 218,000 $20,000 38,000 58,000 $160,000 In addition to the assets identified above, Saltz owned a taxi licence in the City of Moose Jaw. This licence expires in nine years. These licences are selling in the open market at approximately $40,000. On January 1, Year 11, Percy Corp paid $175,000 in cash to acquire 7,000 (70%) of the common shares of Saltz Ltd. Saltz's shares were trading for $20 per share just after the acquisition by Percy. Required $21 Prepare the consolidated balance sheet on January 1, Year 11. a. under the entity theory b. under the parent company extension theory
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