On December 31, 20X6, Profound Limited acquired 100% of the outstanding voting shares of Subtle Limited for $2.2 million in cash. The statements of financial position of Profound and Subtle and the fair values of Subtle's identifiable assets and liabilities immediately before the acquisition transaction were as follows:

Required

Prepare the consolidated SFP for Profound Limited immediately following the acquisition of Subtle Limited.

Transcribed Image Text:

Subtle Limited Profound Limited Carrying value Fair value ASSETS $ 2,300,000 $ 110,000 $ 110,000 Cash Accounts receivable 350,000 600,000 350,000 Inventory 500,000 580,000 650,000 Land 820,000 950,000 1,000,000 Buildings and equipment 6,200,000 1,350,000 1,150,000 Accumulated depreciation (3,000,000) (380,000) 160,000 Patents 210,000 $7,600,000 $3,040,000 LIABILITIES AND SHAREHOLDERS' EQUITY $ 460,000 $1,100,000 Accounts payable $460,000 Long-term debt 2,100,000 980,000 850,000 Common shares 1,550,000 1,000,000 Retained earnings 2,850,000 600,000 $7,600,000 $3,040,000