Reference no: EM132479088
Pareto and Sareto had the following balance sheets on December 31, 2017.
Pareto Pareto Sareto Sareto
(carrying value) (fair value) (carrying value) (fair value)
Cash $180,000 $180,000 $36,000 $36,000
Accounts Receivable $100,000 $125,000 $40,000 $33,000
Inventory $ 60,000 $53,000 $48,000 $55,000
Plant and Equipment (net) $200,000 $200,000 $50,000 $72,000
Goodwill $ - $ 8,000
Trademark $ - $6,000 $8,000
Total Assets $540,000 $188,000
Current Liabilities $ 80,000 $80,000 $42,000 $23,000
Bonds Payable $320,000 $310,000 $16,000 $20,000
Common Shares $ 90,000 $80,000
Retained Earnings $ 50,000 $50,000
Total Liabilities and Equity $540,000 $188,000
Question 1: Assuming that Pareto acquired 80% of Sareto for $160,000 cash on December 31, 2017, prepare the consolidated balance sheet on the date of acquisition.
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