The July 31, Year 3, balance sheets of two companies that are parties to a business combination are as follows:Current assetsProperty, plant, and equipment (net)PatentsCurrent liabilitiesLong-term debtCommon sharesRetained earningsIn addition to the property, plant, and equipment identified above, Red Corp. attributed a value of $109,000 to Saxs assembled workforce. They have the knowledge and skill to operate Saxs manufacturing facility and are essential to the success of the operation. Although the eight manufacturing employees are not under any employment contracts, management of Red was willing to pay $109,000 as part of the purchase price on the belief that most or all of these employees would continue to work for the company.Effective on August 1, Year 3, the shareholders of Sax accepted an offer from Red Corporation to purchase all of their common shares. Reds costs for investigating and drawing up the share purchase agreement amounted to $11,000.(c)Assume the same facts as part (b) except that Red is a private company, uses ASPE, and chooses to use the cost method to account for its investment in Sax.Prepare the balance sheet of Red as at August 1, Year 3