Use the following information to answer questions 19-20
[The following information applies to the questions displayed below.]
The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:
| BALANCE SHEETS | |||||||||||
| December 31, 2017 | |||||||||||
| Patrick | Sean | ||||||||||
| Cash | $ | 76,000 | $ | 46,000 | |||||||
| Accounts receivable (net) | 134,000 | 26,000 | |||||||||
| Inventories | 92,000 | 54,000 | |||||||||
| Plant and equipment (net) | 632,000 | 268,000 | |||||||||
| Investment in Sean | 440,000 | - | |||||||||
| Total assets | $ | 1,374,000 | $ | 394,000 | |||||||
| Accounts payable | 152,000 | 100,000 | |||||||||
| Long-term debt | 120,000 | 32,000 | |||||||||
| Common stock ($10 par) | 306,000 | 78,000 | |||||||||
| Additional paid-in capital | 14,000 | ||||||||||
| Retained earnings | 796,000 | 170,000 | |||||||||
| Total liabilities and shareholders' equity | $ | 1,374,000 | $ | 394,000 | |||||||
Additional Information:
On December 31, 2017, Patrick acquired 100 percent of Sean’s voting stock in exchange for $440,000.
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 $26,000 more than their carrying amounts.
Problem 2-19 (LO 2-4, 2-5)
In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total assets should be reported?
rev: 05_16_2017_QC_CS-88999
Multiple Choice
$1,354,000
$1,374,000
$1,506,000
$1,946,000
Problem 2-20 (LO 2-4, 2-5)
In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total stockholders’ equity should be reported?
Multiple Choice
$1,076,000
$1,102,000
$1,128,000
$1,306,000
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| total assets should be reported: | |||
| Patrik Total Assets | 1374000 | ||
| Add: Sean Total Assets | 394000 | ||
| Less: Investment in Sean | -440000 | ||
| Add: Inventory | 26000 | ||
| Add: Goodwill (440000-78000-14000-170000-26000) | 152000 | ||
| 1506000 | |||
| total stockholders’ equity should be reported? | |||
| Patrik Common Stock | 306000 | ||
| Patrik Retained Earning | 796000 | ||
| 1102000 | |||
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