On December 31, 2019, Remburn Inc. purchased 80% of the outstanding voting shares of Stanton Inc. for
Question:
On December 31, 2019, Remburn Inc. purchased 80% of the outstanding voting shares of Stanton Inc. for $350,000 plus a commitment to pay an additional $150,000 in two years if sales grow by more than 30% over the next two years. An independent business valuator stated that the contingent consideration based on sales growth could have settled by Remburn by paying an extra $50,000 at the date of acquisition. The balance sheets of both companies, as well as Stanton's fair values on the date of acquisition are shown below:
Remburn Inc. | Stanton Inc. | Stanton Inc. | |
(carrying value) | (carrying value) | (fair value) | |
Cash | $400,000 | $5,000 | $5,000 |
Accounts Receivable | $240,000 | $30,000 | $30,000 |
Inventory | $60,000 | $30,000 | $50,000 |
Investment in Stanton Inc. | $90,000 | ||
Equipment (net) | $160,000 | $25,000 | $20,000 |
Land | - | $20,000 | $30,000 |
Trademark | - | $10,000 | $15,000 |
Total Assets | $950,000 | $120,000 | |
Current Liabilities | $500,000 | $50,000 | $50,000 |
Bonds Payable | $120,000 | $20,000 | $30,000 |
Common Shares | $200,000 | $30,000 | |
Retained Earnings | $130,000 | $20,000 | |
Total Liabilities and Equity | $950,000 | $120,000 |
Required：
Prepare a consolidated balance sheet as at December 31, 2019
Expert Answer:
Working Links Consolidated Balance Sheet of remburn Inc as at December 31 2019 Amount ... View the full answer
