The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:

Additional Information:
• On December 31, 2017, Patrick acquired 100 percent of Sean's voting stock in exchange for $460,000.
• At the acquisition date, the fair values of Sean's assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Sean's inventory were $25,000 more than their carrying amounts.
In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total assets should be reported?
a. $1,375,000
b. $1,395,000
c. $1,520,000
d. $1,980,000

Transcribed Image Text:

BALANCE SHEETS December 31, 2017 Patrick Sean Cash Accounts receivable (net) Inventories Plant and equipment (net) Investment in Sean Total assets $ 80,000 140,000 90,000 625,000 460,000 $1,395,000 $ 60,000 25,000 50,000 280,000 $415,000 Accounts payable Long-term debt Common stock ($10 par) Additional paid-in capital Retained earnings Total liabilities and shareholders' equity $95,000 30,000 50,000 10,000 230,000 $415,000 $ 160,000 1 10,000 340,000 785,000 $1,395,000