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The July 31 , Year 3 , balance sheets of two companies that are parties to a business combination
are as follows: Required: a) Assume that Red made a $960 , 000 cash payment to the
shareholders of Sax for 100% of their shares. (i) Prepare the journal entry(ries) in the records of
Red to record the share acquisition. (ii) Prepare the consolidated balance sheet of Red Corp. as at
August 1, Year 3 in "good form". Hints: Goodwill = $84 , 000 Consolidated balance sheet total
assets = $3 , 298 , 000

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