BALANCE SHEETS December 31, 2017 Patrick Sean $ 80,000 140,000 90,000 625,000 460,000 $ 60,000 25,000 50,000 280,000 Cash ... Accounts receivable (net) Inventories.. Plant and equipment (net) Investment in Sean.. $1,395,000 $415,000 $ 95,000 30,000 50,000 10,000 230,000 Total assets $ 160,000 110,000 Accounts payable. Long-term debt Common stock ($10 par). Additional paid-in capital. Retained earnings... 340,000 785,000 Total liabilities and shareholders' equity $1,395,000 $415,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problems 19 and 20 are based on the following information.
The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:
Additional Information:
• On December 31, 2017, Patrick acquired 100 percent of Sean’s voting stock in exchange for $460,000.
• 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 $25,000 more than their carrying amounts.
In the December 31, 2017, consolidated balance sheet of Patrick and its subsidiary, what amount of total stockholders’ equity should be reported?
a. $1,100,000
b. $1,125,000
c. $1,150,000
d. $1,355,000

BALANCE SHEETS
December 31, 2017
Patrick
Sean
$ 80,000
140,000
90,000
625,000
460,000
$ 60,000
25,000
50,000
280,000
Cash ...
Accounts receivable (net)
Inventories..
Plant and equipment (net)
Investment in Sean..
$1,395,000
$415,000
$ 95,000
30,000
50,000
10,000
230,000
Total assets
$ 160,000
110,000
Accounts payable.
Long-term debt
Common stock ($10 par).
Additional paid-in capital.
Retained earnings...
340,000
785,000
Total liabilities and shareholders' equity
$1,395,000
$415,000
Transcribed Image Text:BALANCE SHEETS December 31, 2017 Patrick Sean $ 80,000 140,000 90,000 625,000 460,000 $ 60,000 25,000 50,000 280,000 Cash ... Accounts receivable (net) Inventories.. Plant and equipment (net) Investment in Sean.. $1,395,000 $415,000 $ 95,000 30,000 50,000 10,000 230,000 Total assets $ 160,000 110,000 Accounts payable. Long-term debt Common stock ($10 par). Additional paid-in capital. Retained earnings... 340,000 785,000 Total liabilities and shareholders' equity $1,395,000 $415,000
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