The balance sheets of Par Ltd. and Sub Ltd. on December 31, Year 1, are as follows:

 

Â	Â	Par Ltd.	Â	Sub Ltd.
Cash	Â	$ 100,000	Â	$ 2,000
Accounts receivable		$ 25,000	Â	$ 7,000
Inventory		$ 30,000	Â	$ 21,000
Plant	Â	$ 175,000	Â	$ 51,000
Trademarks		$ -	Â	$ 7,000
Â	Â	$ 330,000	Â	$ 88,000

 

The fair values of the identifiable net assets of Sub on December 31, Year 1, are as follows:

 

Cash	Â	Â	Â	$ 2,000
Accounts receivable		Â	Â	$ 7,000
Inventory		Â	Â	$ 26,000
Plant	Â	Â	Â	$ 60,000
Trademarks		Â	Â	$ 14,000
Â	Â	Â	Â	$ 109,000
Current liabilities		$ 10,000	Â	Â
Long-term debt		$ 19,000	Â	$ 29,000
Net assets		Â	Â	$ 80,000

 

Assume that the following took place on January 1, Year 2. (Par acquired the shares with a cash payment to the shareholders of Sub.)

 

· Case 1. Par paid $95,000 to acquire all of the common shares of Sub.

 

· Case 2. Par paid $76,000 to acquire 80% of the common shares of Sub.

 

· Case 3. Par paid $80,000 to acquire all of the common shares of Sub.

 

· Case 4. Par paid $70,000 to acquire all of the common shares of Sub.

 

· Case 5. Par paid $63,000 to acquire 90% of the common shares of Sub.

 

Required: For each of the five cases, prepare a consolidated balance sheet as at January 1, Year 2.

 

 

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