Question

In: Accounting

The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are...

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 $ 70,000 $ 56,000
Accounts receivable (net) 144,000 30,000
Inventories 100,000 42,000
Plant and equipment (net) 628,000 260,000
Investment in Sean 440,000 -
Total assets $ 1,382,000 $ 388,000
Accounts payable 170,000 98,000
Long-term debt 102,000 22,000
Common stock ($10 par) 340,000 62,000
Additional paid-in capital 14,000
Retained earnings 770,000 192,000
Total liabilities and shareholders' equity $ 1,382,000 $ 388,000

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 $24,000 more than their carrying amounts.

A) In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total assets should be reported?

B) In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total stockholders’ equity should be reported?

Multiple Choice

  • $1,362,000

  • $1,382,000

  • $1,502,000

  • $1,942,000

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