On August 31, 2019, Parent purchased 90% of Sub for cash consideration of $400,000. The respective balance sheets on the acquisition date were

	Parent	Sub	Sub
	(carrying value)	(carrying value)	(fair value)
Cash	$1,200,000	$300,000	$300,000
Accounts Receivable	$ 400,000	$ 64,000	$ 64,000
Inventory	$ 240,000	$ 80,000	$ 60,000
Plant and Equipment (net)	$ 860,000	$256,000	$300,000
Trademark		$ 20,000	$ 36,000
Total Assets	$2,700,000	$720,000
Accounts Payable	$1,500,000	$300,000	$300,000
Bonds Payable	$ 600,000	$240,000	$210,000
Common Shares	$ 500,000	$ 60,000
Retained Earnings	$ 100,000	$120,000
Total Liabilities and Equity	$2,700,000	$720,000

Required

1. Prepare the Parents first consolidated balance sheet after the acquisition.
2. Assume now Sub is located overseas. and both companies have completely different lines of business. The CEO asked you whether they it is possible not to consolidate the results Company Respond to the CEO with your own words . 

Answer rating: 100% (QA)

Part a Parent Consolidated Balance sheet As at August 31 2019 Current assets Cash 1100000 Accounts receivables 464000 Inventory 300000 Total current a... View the full answer