Z 1:8 Task 2-Assessment.docx celiul> Question One: Putney Inc. acquired 100% of the outstanding common stock of Shad Inc. for OMR2,500,000 cash and 15,000 shares of its common stock (OMR2 par value). The stock's market value was OMR40 on the acquisition date. In addition, Putney Inc. incurred the following direct costs: OMR Accounting fees for the purchase 15.000 Legal fees for registering the common stock 30,000 Other legal fees for the acquisition 45,000 Travel expenses to meet with Shad managers 5.000 SEC filing fees 2.000 97000 Before the acquisition consummation date, OMR90,000 of the direct costs was charged to a deferred charges account pending the completion of the acquisition. The remaining OMR7,000 has not been accrued or paid. Required: a. Prepare the journal entry to record the acquisition (5 marks) b. Prepare the journal entry to record both the acquisition and the direct costs. (3 marks) Total: 8 marks Answer: a. 70V V:.. Task 2-Assessment.docx celiul> Question Two: The following case shows the financial position of a parent company (Par) and its subsidiary company (Sub) on November 30, 2019, just after the parent had purchased 90% of the subsidiary's stock: Par (OMR) Sub (OMR) 780,000 280,000 Investment in S Company 190.000 Current assets Long term assets Other assets Total asset Current liabilities Long term liabilities Common stock Retained earnings Total equities 1,200.000 70 000 2.240.000 700,000 920.000 600.000 20.000 2.240.000 400,000 70.000 750.000 260,000 270,000 180,000 40.000 750,000 Required: a. Prepare a computation and allocation of Difference between implied value and book value for Par Co. (6 marks) b. Prepare consolidated financial statement workpaper for year ending 30th November 2019 for Par Co and subsidiary. A template is provided for you in the answer sheet marked in red as A template to answer Question Two (b) to answer this part. You need to fill in the relevant spaces with correct answers. (16 marks) Total: 22 marks ZOV : Task 2-Assessment.docx celiul> A template to answer Question SOHAR UNIVERSITY Two (b) Consolidated financial statement Worksheet, November 30, 2019 PAR COMPANY AND SUBSIDIARY Consolidated Balance Sheet Workpaper November 30, 2019 OMR OMR OMR OMR OMR Eliminations Noncontrolling Consolidated Company Company | Dr. Cr. Interest Balance OMR Par Sub Current Assets 780,000 280,000 Investment in Sub Company 190,000 Difference between Implied & Book Value Long-term Assets 1.200,000 400,000 Other Assets 70,000 70,000 Total Assets 2,240,000 750,000 Current Liabilities 700,000 260,000 Long-term Liabilities 920,000 270,000 Common Stock: Par Company 600,000 Sub Company 180,000 Retained Earnings Par Company 20,000 Sub Company 40,000 Noncontrolling Interest Total Liabilities and 2,240,000 750,000 Equity Z 1:8 Task 2-Assessment.docx celiul> Question One: Putney Inc. acquired 100% of the outstanding common stock of Shad Inc. for OMR2,500,000 cash and 15,000 shares of its common stock (OMR2 par value). The stock's market value was OMR40 on the acquisition date. In addition, Putney Inc. incurred the following direct costs: OMR Accounting fees for the purchase 15.000 Legal fees for registering the common stock 30,000 Other legal fees for the acquisition 45,000 Travel expenses to meet with Shad managers 5.000 SEC filing fees 2.000 97000 Before the acquisition consummation date, OMR90,000 of the direct costs was charged to a deferred charges account pending the completion of the acquisition. The remaining OMR7,000 has not been accrued or paid. Required: a. Prepare the journal entry to record the acquisition (5 marks) b. Prepare the journal entry to record both the acquisition and the direct costs. (3 marks) Total: 8 marks Answer: a. 70V V:.. Task 2-Assessment.docx celiul> Question Two: The following case shows the financial position of a parent company (Par) and its subsidiary company (Sub) on November 30, 2019, just after the parent had purchased 90% of the subsidiary's stock: Par (OMR) Sub (OMR) 780,000 280,000 Investment in S Company 190.000 Current assets Long term assets Other assets Total asset Current liabilities Long term liabilities Common stock Retained earnings Total equities 1,200.000 70 000 2.240.000 700,000 920.000 600.000 20.000 2.240.000 400,000 70.000 750.000 260,000 270,000 180,000 40.000 750,000 Required: a. Prepare a computation and allocation of Difference between implied value and book value for Par Co. (6 marks) b. Prepare consolidated financial statement workpaper for year ending 30th November 2019 for Par Co and subsidiary. A template is provided for you in the answer sheet marked in red as A template to answer Question Two (b) to answer this part. You need to fill in the relevant spaces with correct answers. (16 marks) Total: 22 marks ZOV : Task 2-Assessment.docx celiul> A template to answer Question SOHAR UNIVERSITY Two (b) Consolidated financial statement Worksheet, November 30, 2019 PAR COMPANY AND SUBSIDIARY Consolidated Balance Sheet Workpaper November 30, 2019 OMR OMR OMR OMR OMR Eliminations Noncontrolling Consolidated Company Company | Dr. Cr. Interest Balance OMR Par Sub Current Assets 780,000 280,000 Investment in Sub Company 190,000 Difference between Implied & Book Value Long-term Assets 1.200,000 400,000 Other Assets 70,000 70,000 Total Assets 2,240,000 750,000 Current Liabilities 700,000 260,000 Long-term Liabilities 920,000 270,000 Common Stock: Par Company 600,000 Sub Company 180,000 Retained Earnings Par Company 20,000 Sub Company 40,000 Noncontrolling Interest Total Liabilities and 2,240,000 750,000 Equity