Prepare Jean Inc consolidated balance sheet

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Reference no: EM133099242

Question - Jean and John Inc had the following balance sheets on August 31, 2019:

 

Jean Inc.

John Inc.

John Inc.

 

(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


On August 31, 2019, Jean's date of acquisition, Jean Inc. purchased 90% of John Inc. for cash consideration of $400,000.

Assuming the above balance sheets were prepared immediately before the acquisition, prepare Jean Inc's consolidated balance sheet on the date of acquisition using the Fair Value Enterprise Method.

Reference no: EM133099242

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