The separate condensed balance sheets of Patrick Corporation and its wholly-owned subsidiary, Sean Corporation, are as follows: BALANCE SHEETS December 31, 2020 Patrick Sean Cash $ 74,000 $ 76,000 Accounts receivable (net) 130,000 38,000 Inventories 86,000 54,000 Plant and equipment (net) 626,000 274,000 Investment in Sean 456,000 - Total assets $ 1,372,000 $ 442,000 Accounts payable 178,000 80,000 Long-term debt 110,000 26,000 Common stock ($10 par) 322,000 46,000 Additional paid-in capital 12,000 Retained earnings 762,000 278,000 Total liabilities and shareholders' equity $ 1,372,000 $ 442,000 Additional Information: On December 31, 2020, Patrick acquired 100 percent of Sean’s voting stock in exchange for $456,000. 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. In the December 31, 2020, consolidated balance sheet of Patrick and its subsidiary, what amount of total assets should be reported? Multiple Choice $1,352,000 $1,372,000 $1,478,000

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The separate condensed balance sheets of Patrick Corporation and its wholly-owned subsidiary, Sean Corporation, are as follows:

BALANCE SHEETS
December 31, 2020
	Patrick	Sean
Cash	$	74,000	$	76,000
Accounts receivable (net)		130,000		38,000
Inventories		86,000		54,000
Plant and equipment (net)		626,000		274,000
Investment in Sean		456,000		-
Total assets	$	1,372,000	$	442,000
Accounts payable		178,000		80,000
Long-term debt		110,000		26,000
Common stock ($10 par)		322,000		46,000
Additional paid-in capital				12,000
Retained earnings		762,000		278,000
Total liabilities and shareholders' equity	$	1,372,000	$	442,000

Additional Information:

On December 31, 2020, Patrick acquired 100 percent of Sean’s voting stock in exchange for $456,000.
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.

In the December 31, 2020, consolidated balance sheet of Patrick and its subsidiary, what amount of total assets should be reported?

Multiple Choice