Reference no: EM131198656
On June 30, 2011, Wisconsin, Inc., issued $300,000 in debt and 15,000 new shares of its $10 par value stock to Badger Company owners in exchange for all of the outstanding shares of that company. Wisconsin shares had a fair value of $40 per share. Prior to the combination, the financial statements for Wisconsin and Badger for the six-month period ending June 30, 2011, were as follows:
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Wisconsin
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Badger
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Revenues
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($900,000)
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($300,000)
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Expenses
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660,000
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200,000
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Net income
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($240,000)
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($100,000)
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Retained earnings, 1/1
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($800,000)
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($200,000)
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Net income
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240,000
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100,000
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Dividends paid
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90,000
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-0-
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Retained earnings, 6/30
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($950,000)
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($300,000)
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Cash
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$80,000
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$110,000
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Receivables and inventory
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400,000
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170,000
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Patented technology (net)
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900,000
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300,000
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Equipment (net)
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700,000
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600,000
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Total assets
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$2,080,000
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$1,180,000
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Liabilities
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($500,000)
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($410,000)
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Common stock
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360,000
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200,000
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Additional paid-in capital
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270,000
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270,000
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Retained earnings
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950,000
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300,000
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Total liabilities and equities
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($2,080,000)
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($1,180,000)
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Wisconsin also paid $30,000 to a broker for arranging the transaction. In addition, Wisconsin paid $40,000 in stock issuance costs. Badger's equipment was actually worth $700,000, but its patented technology was valued at only $280,000. What are the consolidated balances for the following accounts?
a. Net income.
b. Retained earnings, 1/1/11.
c. Patented technology.
d. Goodwill.
e. Liabilities.
f. Common stock.
g. Additional paid-In capital.
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