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Wooden Reed Inc. (WRI) issued 30,000 voting common shares to acquire all of the assets...

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Accounting

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 $21.83 per share. After the transaction, CIL owned 20% of WRI's outstanding shares. Below are the statements of financial position of both companies immediately before the transaction, along with the fair values of CIL's assets and liabilities:
WRI carrying value
CIL carrying value
CIL
fair value
Cash
$ 75,000
$ 35,000
$ 35,000
Accounts receivable
180,000
67,500
69,500
Inventory
220,000
125,000
147,000
Property, plant, equipment (net)
880,000
350,000
388,000
$ 1,355,000
$ 577,500
Current liabilities
$ 75,000
$ 25,000
25,000
Long-term debt
235,000
125,000
125,000
Common shares
100,000
165,000
Retained earnings
945,000
262,500
$ 1,355,000
$ 577,500
If the consolidated statement of financial position was created immediately after the acquisition, the consolidated common share account will be:
Question 1 options:
$265,000
$754,900
$919,900
$100,000

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