Parent Inc Assuming That Parent Inc Acquires 80% of Sub Inc on on July

question 52

Multiple Choice

Parent Inc. and Sub Inc. had the following balance sheets on July 31, 2019: $\begin{array}{|l|r|r|r|}\hline & \text { Parent Inc } & \text { Sub Inc } & \text { Sub Inc } \\\hline & \text { (caryying value) } & \begin{array}{r}\text { (carrying } \\\text { value) }\end{array} & \text { (fair value) } \\\hline \text { Cash } & \$ 180,000 & \$ 36,000 & \$ 36,000 \\\hline \text { Accounts Receivable } & \$ 100,000 & \$ 40,000 & \$ 40,000 \\\hline \text { Inventory } & \$ 60,000 & \$ 24,000 & \$ 27,000 \\\hline \text { Plant and Equipment (net) } & \$ 200,000 & \$ 80,000 & \$ 93,000 \\\hline \text { Goodwill } & \$- & \$ 8,000 & \\\hline \text { Trademark } & \$- & \$ 12,000 & \$ 15,000 \\\hline \text { Total Assets } & \$ \mathbf{5 4 0 , 0 0 0} & \$ 200,000 & \\\hline \text { Current Liabilities } & \$ 80,000 & \$ 50,000 & \$ 50,000 \\\hline \text { Bonds Payable } & \$ 320,000 & \$ 20,000 & \$ 24,000 \\\hline \text { Common Shares } & \$ 90,000 & \$ 80,000 \\\hline \text { Retained Earnings } & \$ 50,000 & \$ 50,000 \\\hline \text { Total Liabilities and Equity } & \$ 540,000 & \$ 200,000 \\\hline\end{array}$ Assuming that Parent Inc acquires 80% of Sub Inc on August 1, 2019 for cash of $180,000, the assets section of Parent's consolidated balance sheet on the date of acquisition would total what amount if the proportionate consolidation method were used?

• A) $669,600
• B) $599,200
• C) $651,000
• D) $520,000

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Definitions:

Realization of the Self

The achievement of understanding and accepting one's own unique qualities and living authentically according to personal values and potentials.

Jungian Analysis

A therapeutic approach based on the theories of Carl Jung, focusing on the integration of the conscious and unconscious parts of the mind.

Formal Training

The process of acquiring skills, knowledge, and competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific useful competencies.

Principal of Equivalence

In psychoanalysis, the idea that energy diverted from one psychic avenue will emerge in another, maintaining a balance within the psyche.