1. G Company is considering the takeover of K Company whereby it will issue 6,100 common
shares for all of the outstanding shares of K Company. K Company will become a wholly owned
subsidiary of G Company. Prior to the acquisition, G Company had 19,000 shares outstanding,
which were trading at $7.20 per share. The following information has been assembled: Required:
(a) Prepare G Company's consolidated balance sheet immediately after the combination using the
direct approach and accounting for the combination with (i) The acquisition method
(ii) The new-entity method (b) Calculate the current ratio and debt-to-equity ratio for G
Company under both methods. (Round your answers to 2 decimal places.) (c) Prepare G
Company's consolidated balance sheet immediately after the combination using the worksheet
approach and the acquisition method. (Leave no cells blank - be certain to enter "O" wherever
required. Values in the first two columns and last column (the "parent", "subsidiary" and
"consolidated" balances) that are to be deducted should be indicated with a minus sign, while all
values in the "Entry" columns should be entered as positive values. For accounts where multiple
adjusting entries are required, combine all debit entries into one amount and enter this amount in
the debit column of the worksheet. Similarly, combine all credit entries into one amount and
enter this amount in the credit column of the worksheet. Omit $ sign in your response.)