On January 1, Year 12. Par Corporation of Canada paid FCU 8,200,000 for 85% of the outstanding commonrn

   

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outstanding common shares of Sub Company of Sweden. On this date the fair values of Sub identifiable assets and liabilities were equal to their carrying values. Sub's comparative bala sheets and Year 2 income statement are as follows: Cash, Accounts Receivable Inventory Plant and equipment (net) Accounts payable Note payable Common shares Retained earnings Sales Cost of Goods sold Depreciation expense Other expense Interest expense Net income Sub Balance Sheet December 31 Cash, Accounts Receivable Inventory Goodwill Plant and equipment (net) Accounts payable Note payable Common shares Retained earnings Year 2 FCU 7,590,000 1,830,000 4.790.000 FCU 14.210.000 FCU 1,500,000 3,900,000 4,000,000 4.810,000 FCU 14.210.000 FCU 4,400,000 2,200,000 5,290,000 FCU 11.890.000 Following is the Balance Sheet of Par at December 31, Year 2: PAR $ 1,000,000 850,000 50,000 FCU 1,590,000 3,000,000 4,000,000 3.300.000 FCU 11,890,000 Sub Income Statement For the year ended December 31, Year 2 FCU 9,600,000 5,700,000 500,000 1,300,000 400,000 FCU 1.700,000 Year 1 2,000,000 $ 3.900.000 $ 200,000 900,000 1,500,000 1,300,000 $ 3,900.000 outstanding common shares of Sub Company of Sweden. On this date the fair values of Sub identifiable assets and liabilities were equal to their carrying values. Sub's comparative bala sheets and Year 2 income statement are as follows: Cash, Accounts Receivable Inventory Plant and equipment (net) Accounts payable Note payable Common shares Retained earnings Sales Cost of Goods sold Depreciation expense Other expense Interest expense Net income Sub Balance Sheet December 31 Cash, Accounts Receivable Inventory Goodwill Plant and equipment (net) Accounts payable Note payable Common shares Retained earnings Year 2 FCU 7,590,000 1,830,000 4.790.000 FCU 14.210.000 FCU 1,500,000 3,900,000 4,000,000 4.810,000 FCU 14.210.000 FCU 4,400,000 2,200,000 5,290,000 FCU 11.890.000 Following is the Balance Sheet of Par at December 31, Year 2: PAR $ 1,000,000 850,000 50,000 FCU 1,590,000 3,000,000 4,000,000 3.300.000 FCU 11,890,000 Sub Income Statement For the year ended December 31, Year 2 FCU 9,600,000 5,700,000 500,000 1,300,000 400,000 FCU 1.700,000 Year 1 2,000,000 $ 3.900.000 $ 200,000 900,000 1,500,000 1,300,000 $ 3,900.000

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We need to calculate Goodwill first Goodwill will be calculated on acquisition date ie 1st Jan of Ye... View the full answer