ClassCo acquires StudentCo with pre acquisition Balance Sheets below ClassCo pays $700,000 cash +52,950,000 in ClassCo shares [new issue] ClassCo determines Fair value of StudentCo assets as follows: Student Co. was not dissolved Inventory Net PPE Current Liabilities A/R FV adjustments to BS items A/R Before Acquisition Assets: Cash and the following FV assets were determined not on Student BS Patents 420,000 4 year life trademarks 150,000 indefinite Inventory Current Assets Net PPE investments Intangibles Goodwill Total Assets Current Liabilities Long term Debt Total Liabilities Equity: Capital Equity: Retained earnings Total Equity Total Liabilities & Equity 50,000 the fair value [V] greater than BV by amt on left 60,000 FV> BV 80,000 the FV is greater than BV by amt, on left, life 5 years 75,000 the FV less than BV for accrued expense in C.Liab. By amt. on left check ClassCo Ss 1.090.000 3,100,000 2,200,000 6,390,000 4,400,000 0 0 110,000 10,900,000 3,000,000 2,900,000 5,900,000 4,000,000 1,000,000 5,000,000 10,900,000 0 StudentCo Ss 440.000 1,100,000 1,450,000 2,990,000 1,500,000 0 0 0 4,790,000 790,000 1,800,000 2,590,000 700,000 2,950,000 1,800,000 400,000 2,200,000 4,790,000 StudentCo FV Ss 0 TO DO [a]Above boxes: Show Fair Value by asset & liability similar to a BS [b]Prepare a post acquisition consolidate balance sheet StudentCo Excess (less) Book 0 110,000 from earlier investment with Student Co not dissolved; show column of ClassCo BS after acquisition, Show StudentCo column Student Co BS and consolidating columns and consolidated BS

with Student Co not dissolved; show column of ClassCo BS after acquisition, Show StudentCo column Student