Problem $04-17($LO$2,4)$

The balance sheets of Par Ltd$.$ and Sub Ltd$.$ on December $31,$ Year $1,$ are as follows:$$

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$$Par Ltd$.$Sub Ltd$.$Cash$$100,000$$$2,000$Accounts receivable$25,0007,000$Inventory$30,00021,000$Plant$175,00051,000$Trademarks$-7,000$$$330,000$$$88,000$Current liabilities$$50,000$$$10,000$Long$-$term debt$80,00020,000$Common shares$110,00030,000$Retained earnings$90,00028,000$$$330,000$$$88,000$

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The fair values of the identifiable net assets of Sub on December $31,$ Year $1,$ are as follows:

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$$Cash$$$$2,000$Accounts receivable$7,000$Inventory$26,000$Plant$60,000$Trademarks$14,000$$$109,000$Current liabilities$$10,000$Long$-$term debt$19,00029,000$Net assets$$$$80,000$

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Assume that the following took place on January $1,$ Year $2.($Par acquired the shares with a cash payment to the shareholders of Sub.$)$

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Case $1.$ Par paid $$95,000$ to acquire all of the common shares of Sub.

Case $2.$ Par paid $$76,000$ to acquire $80\%$ of the common shares of Sub.

Case $3.$ Par paid $$80,000$ to acquire all of the common shares of Sub.

Case $4.$ Par paid $$70,000$ to acquire all of the common shares of Sub.

Case $5.$ Par paid $$63,000$ to acquire $90\%$ of the common shares of Sub.

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Required:

Case $1.$ Prepare a consolidated balance sheet as at January $1,$ Year $2.$

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Case $2.$ Prepare a consolidated balance sheet as at January $1,$ Year $2,$ under the fair value enterprise method.

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Case $3.$ Prepare a consolidated balance sheet as at January $1,$ Year $2.$

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