On December 31, 20X6, Prager Limited acquired 100% of the outstanding voting shares of Sabre Limited for $ 2 million in cash; 75% of the cash was obtained by issuing a five- year note payable. The statements of financial position of Prager and Sabre and the fair values of Sabre’s identifiable assets and liabilities immediately before the acquisition transaction were as follows:

Required

Prepare the consolidated SFP for Prager Limited immediately following the acquisition of Sabre Limited.

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Sabre Limited Prager Limited Carrying value Fair value ASSETS: Cash Accounts receivable Inventory Land Buildings and equipment Accumulated depreciation Patents 800,000 500,000 600,000 900,000 6,000,000 (2,950,000) 100,000 300,000 600,000 800,000 1,400,000 (400,000) 200,000 100,000 300,000 662,500 900,000 1,200,000 150,000 $5,850,000 13,000,000 LIABILITIES AND SHAREHOLDERS EQUITY Accounts payable Long-term debt Common shares Retained eamings $1,000,000 2,000,000 1,500,000 1,350,000 $5,850,000 500,000 1,000,000 950,000 550,000 3,000,000 500,000 900,000