On January 4, 20X7, Pradeesh Corp. acquired 100% of the outstanding common shares of Serena Inc. by a share- for- share exchange of its own shares valued at $ 1,000,000. The statements of financial position of both companies just prior to the share exchange are shown below. Serena has patents that are not shown on the SFP, but that have an estimated fair value of $ 200,000 and an estimated remaining productive life of four years. Serena’s buildings and equipment have an estimated fair value that is $ 300,000 in excess of carrying value, and the deferred charges are assumed to have a fair value of zero. Serena’s buildings and equipment are being depreciated on the straight-line basis and have a remaining useful life of 10 years. The deferred charges are being amortized over the following three years. Please note that the spreadsheet relating to the problem is available on the companion website for this text.

Prepare a consolidated SFP for Pradeesh Corp., immediately following the shareexchange.

  • CreatedMarch 13, 2015
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