Question: Problems 20 and 21 are based on the following information. The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation,
Problems 20 and 21 are based on the following information. The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:
BALANCE SHEETS
December 31, 2020
Patrick Sean
Cash $80,000 $60,000
Accounts receivable (net) $140,000 $25,000
Inventories $90,000 $50,000
Plant and equipment (net) $625,000 $280,000
Investment in Sean $460,000 $ -0-
Total assets $1,395,000 $415,000
Accounts payable $160,000 $95,000
Long-term debt $110,000 $30,000
Common stock ($10 par) $340,000 $50,000
Additional paid-in capital $10,000
Retained earnings $785,000 $230,000
Total liabilities and shareholders equity $1,395,000 $415,000
Additional Information:
- On December 31, 2020, Patrick acquired 100 percent of Seans voting stock in exchange for $460,000.
- At the acquisition date, the fair values of Seans assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Seans inventory were $25,000 more than their carrying amounts.
20. In the December 31, 2020, consolidated balance sheet of Patrick and its subsidiary, what amount of total assets should be reported?
- $1,375,000
- $1,395,000
- $1,520,000
- $1,980,000
21. In the December 31, 2020, consolidated balance sheet of Patrick and its subsidiary, what amount of total stockholders equity should be reported?
- $1,100,000
- $1,125,000
- $1,150,000
- $1,355,000
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