Reference no: EM132845429

Question - The balance sheets of E Ltd. and J Ltd. on December 30, Year 6, were as follows:

	E Ltd.	J Ltd.
Cash and receivables	$96,850	$21,200
Inventory	58,700	9,850
Plant assets (net)	231,400	72,200
Intangible assets	24,850	7,700
	$411,800	$110,950
Current liabilities	$64,700	$30,100
Long-term debt	99,200	45,200
Common shares	156,400	46,600
Retained earnings (deficit)	91,500	(10,950)
	$411,800	$110,950

On December 31, Year 6, E Ltd. issued 525 shares, with a fair value of $40 each, for 70% of the outstanding shares of J Ltd. Costs involved in the acquisition, paid in cash, were as follows:

Costs of arranging the acquisition $2,670

Costs of issuing shares 1,940

$4,610

The carrying amounts of J Ltd.'s net assets were equal to fair values on this date except for the following:

Fair value Plant assets $65,850

Long-term debt 43,400

E Ltd. was identified as the acquirer in the combination.

Required -

(a) Create the consolidated balance sheet of E Ltd. on December 31, Year 6, under the identifiable net assets method.

(b) Create the consolidated balance sheet of E Ltd. on December 31, Year 6, under the fair value enterprise method.