BUSI/COMIVI 453 Assignment 3: Total marks 80 NOTE: Good format so include proper title with proper dates All calculations must be shown (i.e. for NCI, Cons. RE, etc) All #s must be given in brackets on Cons. Statements along with totals Only 4 columns for AD amort./loss schedule (in proper sequence) Question 1. 68 marks On January 1, 2015, PAD purchased 80% of the common shares of SBC for $4,500,000. On that date, SBC had common shares of $1,250,000 and retained earnings of $3,000,000, and fair values were equal to carrying values for all its net assets except inventory that was overvalued $60,000, property, plant and equipment that was undervalued $120,000 (remaining useful life of 10 years), and note payable undervalued 5,000 (5 years to maturity) on SBC's books. The nancial statements for PAD and SBC for the year ended December 31, 2018 were as follows: Balance Sheets December 31, 2018 PAD Cash $ 680,000 Accounts receivable 1,505,000 Note receivable 50,000 Inventory 2,800,000 Property, plant and equipment 4,676,000 Accumulated depreciation 1,000,000 Investment in SBC 4,500,000 Total assets 13,211,000 Current liabilities $ 400,000 Notes payable 5,251,000 Common shares 2,000,000 Retained earnings 5,560,000 Total 13,211,000 SBC $ 435,000 1,005,000 20,000 1,790,000 3,500,000 500,000 6,250,000 $ 255,000 1,185,000 1,250,000 3,560,000 $3 6,250,000