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The balance sheets of Petron Co. and Seeview Co. on June 29, Year 2 were as follows: Cash and receivables Inventory Plant assets (net) Intangible

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The balance sheets of Petron Co. and Seeview Co. on June 29, Year 2 were as follows: Cash and receivables Inventory Plant assets (net) Intangible assets Petron $ 94,900 61, 450 204,900 33, 950 $ 395, 200 $ 67,400 95, 200 141, 450 91, 150 $ 395, 200 Seeview $ 21,000 9, 100 61,000 8, 200 $ 99, 300 28, 550 42,000 41,000 (12, 250) $ 99, 300 Current liabilities Long-term debt Common shares Retained earnings (deficit) On June 30, Year 2, Petron Co. purchased 90% of the outstanding shares of Seeview Co. for $69,300 cash. Legal fees involved with the acquisition were an additional $3,250. These two transactions were the only transactions on this date. The carrying amounts of Seeview's net assets were equal to fair value except for the following: Inventory Plant assets Intangible assets Long-term debt Fair Value $ 11,000 72,000 12,000 34,750 Seeview has a five-year agreement to supply goods to Bardier. Both Petron and Seeview believe that Bardier will renew the agreement at the end of the current contract. The agreement is between Seeview and Bardier; it cannot be transferred to another company without Seeview's consent. Seeview does not report any value with respect to this contract on its balance sheet. However, an independent appraiser feels that this contract is worth $24,500. Required: (a) Assume that Petron Co. is a public entity. Prepare the consolidated balance sheet of Petron Co. on June 30, Year 2 Petron Co. Consolidated Balance Sheet June 30, Year 2 (b) Assume that Petron is a private entity, uses ASPE, and chooses to use the equity method to account for its investment in Seeview. Prepare Petron's June 30, Year 2, separate entity balance sheet after the business combination. (c) Prepare Petron Co's consolidated balance sheet using the worksheet approach. (Values in the first two columns and last column (the "parent", "subsidiary" and "consolidated" balances) that are to be deducted should be indicated with a minus sign, while all values in the "Entry" columns should be entered as positive values. For accounts where multiple adjusting entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Leave no cells blank - be certain to enter "O" wherever required.) Consolidated Financial Statement Vorking Paper Consolidated Balance Sheet June 30, Year 2 Entries Petron $ Seeview $ Dr. Ce. $ Consolidated $ Cash and receivables Inventory Plant sets (net) Intangible assets Investment in Seeview Acquisition differential Customer contract Goodwill Liabilities Current liabilities Long-tern debt I Shareholders' equity Common shares Retained earnings Non-controlling interest Els Total

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