The separate entity and consolidated balance sheets of Bernard Ltd. on December 31, Year 2, just after the transaction described below, were as follows:

On December 31, Year 2, Bernard purchased 100% of Kamloops Inc.’s common shares for $74,000 in cash. Coincidentally, the carrying amounts of Kamloops’ assets and liabilities were equal to fair value. Kamloops reported goodwill of nil and common shares of $48,050 at the date of acquisition. 

Required 

Prepare Kamloops’ separate entity balance sheet at December 31, Year 2. Plug retained earnings to balance the balance sheet.

Transcribed Image Text:

Cash and receivables Inventory Investment in Kamloops Property and equipment (net) Goodwill Current liabilities Long-term debt Common shares Retained earnings (deficit) Separate Entity $35,000 68,500 74,000 252,000 0 $429,500 $ 73,500 102,250 148,500 105,250 $429,500 Consolidated $ 63,150 79,350 330,100 34,300 $506,900 $ 109,100 144,050 148,500 105,250 $506,900