The balance sheets of Hill Corp. and McGraw Ltd. on December 31, Year 4, were as follows:

On December 31, Year 4, Hill purchased 80% of the common shares of McGraw for $288,000 plus a commitment to pay an additional $100,000 in 2 years if sales grow by more than 30% over the next two years. An independent business valu ator stated that Hill could have paid an extra $40,000 at the date of acquisition instead of agreeing to a potential payment of $100,000 in 2 years. On this date, the inventory of McGraw had a fair value of $214,500, its land had a fair value of $91,000, and its plant and equipment had a fair value of $364,000.
Required:
Prepare a consolidated balance sheet as at December 31, Year 4.

Transcribed Image Text:

McGraw Ltod. $ 6,500 45,500 208,000 52,000 377,000 Hill Corp Cash Accounts receivable Inventory Land Plant and equipment Investment in McGraw Ltd Goodwill $ 13,000 181,300 117,000 91,000 468,000 288,000 117,000 $1,275,300 39,000 728.000 Current liabilities Long-term debt Common shares Retained earnings $156,000 416,000 520,000 183,300 $1,275,300 $104,000 286,000 390,000 (52,000) $728,000