Reference no: EM132826829
Question - The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:
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BALANCE SHEETS December 31, 2020
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Patrick
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Sean
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Cash
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$80,000
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$60,000
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Accounts receivable (net)
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$140,000
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$25,000
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Inventories
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$90,000
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$50,000
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Plant and equipment (net)
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$625,000
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$280,000
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Investment in Sean
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$460,000
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$-0-
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Total assets
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$1,395,000
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$415,000
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Accounts payable
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$160,000
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$95,000
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Long-term debt
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$110,000
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$30,000
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Common stock ($10 par)
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$340,000
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$50,000
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Additional paid-in capital
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$10,000
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Retained earnings
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$785,000
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$230,000
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Total liabilities and shareholders' equity
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$1,395,000
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$415,000
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Additional Information: On December 31, 2020, Patrick acquired 100 percent of Sean's voting stock in exchange for $460,000.
At the acquisition date, the fair values of Sean's assets and liabilities equaled their carrying amounts, respectively, except that the fair value of certain items in Sean's inventory were $25,000 more than their carrying amounts.
Required -
1. In the December 31, 2020, consolidated balance sheet of Patrick and its subsidiary, what amount of total assets should be reported?
a. $1,375,000
b. $1,395,000
c. $1,520,000
d. $1,980,000
2. In the December 31, 2020, consolidated balance sheet of Patrick and its subsidiary, what amount of total stockholders' equity should be reported?
a. $1,100,000
b. $1,125,000
c. $1,150,000
d. $1,355,000