Wooden Reed Inc. (WRI) issued 30,000 voting common shares to acquire all of the assets and liabilities of Creative strument Ltd. (CIL). On the acquisition date, WRI's shares were trading at $21.83 per share. After the transaction, IL owned 20% of WRI's outstanding shares. Below are the statements of financial position of both companies mmediately before the transaction, along with the fair values of CIL's assets and liabilities: WRI CIL Cash Accounts receivable nventory Property, plant, equipment (net) Current liabilities Long-term debt Common shares Retained earnings $754,900 $919,900 $265,000 carrying value carrying value $ 75,000 $ 35,000 $100,000 180,000 220,000 880,000 $ 1,355,000 $ 75,000 235,000 100,000 945,000 $ 1,355,000 E the consolidated statement of financial position was created immediately after the acquisition, the consolidated ommon share account will be: 67,500 125,000 350,000 $ 577,500 $ 25,000 125,000 165,000 262,500 $ 577,500 CIL fair value $ 35,000 69,500 147,000 388,000 25,000 125,000

Wooden Reed Inc. (WRI) issued 30,000 voting common shares to acquire all of the assets and liabilities of Creative strument Ltd. (CIL). On the acquisition date, WRI's shares were trading at $21.83 per share. After the transaction, IL owned 20% of WRI's outstanding shares. Below are the statements of financial position of both companies mmediately before the transaction, along with the fair values of CIL's assets and liabilities: WRI CIL Cash Accounts receivable nventory Property, plant, equipment (net) Current liabilities Long-term debt Common shares Retained earnings $754,900 $919,900 $265,000 carrying value carrying value $ 75,000 $ 35,000 $100,000 180,000 220,000 880,000 $ 1,355,000 $ 75,000 235,000 100,000 945,000 $ 1,355,000 E the consolidated statement of financial position was created immediately after the acquisition, the consolidated ommon share account will be: 67,500 125,000 350,000 $ 577,500 $ 25,000 125,000 165,000 262,500 $ 577,500 CIL fair value $ 35,000 69,500 147,000 388,000 25,000 125,000

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter8: Consolidated Tax Returns

Section: Chapter Questions

Problem 36P

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Wooden Reed Inc. (WRI) issued 30,000 voting common shares to acquire all of the assets and liabilities of Creative Instrument Ltd. (CIL). On the acquisition date, WRI's shares were trading at $22 per share. After the transaction, CIL owned 20% of WRI's outstanding shares. The following information relates to CIL on the acquisition date: Cash Accounts receivable Inventory Property, plant, and equipment (net) Current liabilities Long-term debt Common shares Retained earnings WRI S $ S 75,000 180,000 220,000 880,000 1,355,000 75,000 235,000 100,000 945,000 $ 1,355,000 carrying value CIL $ 35,000 67,500 carrying value 125,000 350,000 $ 577,500 $ 25,000 125,000 165,000 262,500 $ 577,500 CIL fair value $ 35,000 69,500 147,000 388,000 25,000 125,000 Based on the information provided, which of the amounts below correctly reflect amounts that would appear on WRI's statement of financial position?
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