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 $22per share. After the transaction, CIL owned 20% of WRI's outstanding shares. The following information relates to CIL on the acquisition date:CashAccounts receivableInventoryProperty, plant, and equipment (net)Current liabilitiesLong-term debtCommon sharesRetained earningsWRIS$S75,000180,000220,000880,0001,355,00075,000235,000100,000945,000$ 1,355,000carrying value CIL$ 35,00067,500carrying value125,000350,000$ 577,500$ 25,000125,000165,000262,500$ 577,500CILfair value$ 35,00069,500147,000388,00025,000125,000Based on the information provided, which of the amounts below correctly reflect amounts that would appear on WRI's statement of financial position?

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:

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:

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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

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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