The balance sheets of Hill Corp and McGraw Ltd on
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.
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