Jean and John Inc had the following balance sheets on August 31, 2022, just before acquisition:
Question:
Jean and John Inc had the following balance sheets on August 31, 2022, just before acquisition:
| Jean Inc. | John Inc. |
| (carrying value) | (carrying value) |
Cash | $1,200,000 | $300,000 |
Accounts Receivable | $ 400,000 | $ 64,000 |
Inventory | $ 240,000 | $ 80,000 |
Plant and Equipment (net) | $ 860,000 | $256,000 |
Trademark | - | $ 20,000 |
Total Assets | $2,700,000 | $720,000 |
|
|
|
Accounts Payable | $1,500,000 | $300,000 |
Bonds Payable | $ 600,000 | $240,000 |
Common Shares | $ 500,000 | $ 60,000 |
Retained Earnings | $ 100,000 | $120,000 |
Total Liabilities and Equity | $2,700,000 | $720,000 |
On August 31, 2022, Jean's date of acquisition, Jean Inc. purchased 55% of John Inc. by issuing common shares for $245,000.
You were given the following fair values for John Inc. on the date of acquisition:
Inventory - $60,000
Plant & Equipment - $300,000
Trademark - $36,000
Bonds Payable $210,000
How to prepare a Consolidated Balance Sheet, on the Date of Acquisition.
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann