On December 31, 20X5, CI Co $\quad$ $\quad$ $\quad$

question 19

Essay

On December 31, 20X5, CI Co. purchased 100% of the outstanding common shares of SA Ltd. for $1,500,000 in cash; 80% of the cash was obtained by issuing a five-year note payable. The statements of financial position of CI and SA immediately before the acquisition and issuance of the notes payable were as follows (in 000s):
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { CI } \quad \quad \quad \quad \quad \quad\text { SA }$
$\begin{array}{lllll}&\text { Book } & \text { Fair } & \text { Book } & \text { Fair } \\&\text { Value } & \text { Value } & \text { Value } & \text { Value } \\\text { Cash } & \$ 360 & \$ 360 & \$ 200 & \$ 200 \\\text { Accounts receivable } & 520 & 500 & 380 & 380 \\\text { Inventory } & 800 & 880 & 400 & 450 \\\text { Property, plant, and equipment } & \underline{1,820} & 2,000 & \underline{1,420} & 1,520 \\& \$ 3,500 & & \$ 2,400 &\end{array}$ $\begin{array}{lllll}\text { Current liabilities } & \$ 380 & \$ 380 & \$ 260 & \$ 260 \\\text { Long-term liabilities } & 1,200 & 1,200 & 1000 & 1030 \\\text { Common shares } & 500 & & 600 & \\\text { Retained earnings } & \underline{1,420} & & \underline{540} & \\& \$ 3,500 & & \$ 2.400 &\end{array}$ Required:
Prepare the journal entry that CI will post to record the acquisition of CI. Prepare the consolidated statement of financial position for CI immediately following the acquisition of SA.

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Definitions:

Semantic Level

Pertaining to the meaning of words and language, especially the relationship between signifiers and what they signify or represent.

Case Markers

Grammatical markers that indicate the role of a noun, pronoun, or adjective in a sentence, such as subject, object, or possessive.

Semantic Role

The part that each phrase plays in the “who did what to whom” drama described by a sentence. One word takes the role of being the cause of the action, another, its effect, and so on.

Predicate

The part of a sentence or clause containing a verb and stating something about the subject (e.g., 'ran' in 'the dog ran').