Reference no: EM13155509
The following are preliminary financial statements for Black Co. and Blue Co. for the year ending December 31, 2009.
Black Co. Blue Co.
Sales $360,000 $228,000
Expenses (240,000) (240,000)
Net income $120,000 $96,000
Retained earning, jan. $480,000 $252,000
Net income (from above) 120,000 96,000
Dividends paid (36,000) 0
Retained earnings, Dec 31,2009 $564,000 $348,000
Current assets $360,000 $120,000
Land 120,000 108,000
Building (net) 480,000 336,000
Total assets $960,000 564,000
Liabilities $108,000 132,000
Common stock 192,000 72,000
additional paid in capital 96,000 12,000
Retained earninds, Dec 31,09 564,000 348,000
Total liabilities and stockholders' equity $960,000 564,000
On December 31, 2009 (subsequent to the preceding statements), Black exchanged 10,000 shares of its $10 par value common stock for all of the outstanding shares of Blue. Black's stock on that date has a fair value of $60 per share. Black was willing to issue 10,000 shares of stock because Blue's land was appraised at $204,000. Black also paid $14,000 to several attorneys and accountants who assisted in creating this combination.
Required:
Assuming that these two companies retained their separate legal identities, prepare a consolidation worksheet as of December 31, 2009.