Question

[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 $ 72,000 $ 70,000 Accounts receivable (net) 140,000 32,000 Inventories 100,000 62,000 Plant and equipment (net) 634,000 262,000 Investment in Sean 464,000 - Total assets $ 1,410,000 $ 426,000 Accounts payable 144,000 96,000 Long-term debt 112,000 34,000 Common stock ($10 par) 328,000 68,000 Additional paid-in capital 14,000 Retained earnings 826,000 214,000 Total liabilities and shareholders' equity $ 1,410,000 $ 426,000 Additional Information: On December 31, 2017, Patrick acquired 100 percent of Sean’s voting stock in exchange for $464,000. 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

Answer 1