What can be concluded about the balance sheet

Assignment Help Financial Accounting

Reference no: EM133378825

Question: Keen Inc (Keen) and Lax Inc (Lax) had the following balance sheets on October 31, 2022:

	Keen Inc	Lax Inc	Lax Inc
	(carrying value)	(carrying value)	(fair value)
Cash	$300,000	$80,000	$80,000
Accounts receivable	60,000	24,000	24,000
Inventory	30,000	54,000	56,000
Plant and equipment (net)	310,000	280,000	300,000
Trademark		12,000	8,000
Total assets	$700,000	$450,000
Accounts payable	150,000	$200,000	200,000
Bonds payable	400,000	120,000	100,000
Common shares	100,000	60,000
Retained earnings	50,000	70,000
Total liabilities and equity	$700,000	$450,000

On November 1, 2022, Keen acquired 80% of Lax Inc. for cash consideration of $240,000. Assume that the following draft balance sheet was prepared by a co-worker on the date of acquisition. Assuming this balance sheet is devoid of technical errors, what can be concluded about the balance sheet below?

Keen Inc.
Consolidated Balance Sheet, as at November 1, 2022

Cash	$124,000
Accounts receivable	79,200
Inventory	70,000
Plant and equipment (net)	550,000
Trademark	12,800
Goodwill	104,000
Total assets	$940,000
Accounts payable	$310,000
Bonds payable	480,000
Common hares	100,000
Retained earnings	50,000
Total liabilities and equity	$940,000

Reference no: EM133378825

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