Question

2- Dubai Corporation acquired 100 percent of Sharjah Company's common stock on January 1, 2019. Balance sheet data for the two companies immediately following the acquisition follows:

Item	Dubai Corporation					Sharjah Company
Cash		$	30,000					$	25,000
Accounts Receivable			80,000						40,000
Inventory			150,000						55,000
Land			65,000						40,000
Buildings and Equipment			260,000						160,000
Less: Accumulated Depreciation			(120,000	)					(50,000	)
Investment in Spin Company Stock			150,000
Total Assets		$	615,000					$	270,000
Accounts Payable			$45,000						$33,000
Taxes Payable			20,000						8,000
Bonds Payable			200,000						100,000
Common Stock			50,000						20,000
Retained Earnings			300,000						109,000
Total Liabilities and Stockholders' Equity		$	615,000					$	270,000

At the date of the business combination, the book values of Sharjah's net assets and liabilities approximated fair value except for inventory, which had a fair value of $60,000, and land, which had a fair value of $50,000. The fair value of land for Dubai Corporation was estimated at $80,000 immediately prior to the acquisition.

b) Based on the preceding information, what amount of total assets will appear in the consolidated balance sheet prepared immediately after the business combination?

Answer 1

TOTAL Assets after Business Consolidation
Description of Assets	Dubai Corp	Sharjah Corp	Consolidated
Cash	30000	25000	55000
Account Receivable	80000	40000	120000
Inventory	150000	60000	210000
Land (on fair Value)	80000	50000	130000
Building & equipment	260000	160000	420000
Accumulated Depreciation	-120000	-50000	-170000
Goodwill	6000		6000
	486000	285000	771000
Investment not shown seperately as not to be conisdered in consolidated Asset
Calculation for Goodwill
Networth (Common St & Earnings)	129000
Increase in Asset Value (Fair Value)	15000
(10000+50000)	144000
Purchase/Investment	150000
Goodwill	6000