Question
On June 30, 2017, Wisconsin, Inc., issued $137,250 in debt and 22,300 new shares of its $10 par value stock to Badger Company owners in
On June 30, 2017, Wisconsin, Inc., issued $137,250 in debt and 22,300 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, 2017, were as follows:
Wisconsin | Badger | |||||||||||
Revenues | $ | (983,000) | $ | (477,000) | ||||||||
Expenses | 673,000 | 293,000 | ||||||||||
Net income | $ | (310,000) | $ | (184,000) | ||||||||
Retained earnings, 1/1 | $ | (849,000) | $ | (238,000) | ||||||||
Net income | (310,000) | (184,000) | ||||||||||
Dividends declared | 92,500 | 0 | ||||||||||
Retained earnings, 6/30 | $ | (1,066,500) | $ | (422,000) | ||||||||
Cash | $ | 170,500 | $ | 165,000 | ||||||||
Receivables and inventory | 452,000 | 211,000 | ||||||||||
Patented technology (net) | 917,000 | 398,000 | ||||||||||
Equipment (net) | 745,000 | 617,000 | ||||||||||
Total assets | $ | 2,284,500 | $ | 1,391,000 | ||||||||
Liabilities | $ | (588,000) | $ | (499,000) | ||||||||
Common stock | (360,000) | (200,000) | ||||||||||
Additional paid-in capital | (270,000) | (270,000) | ||||||||||
Retained earnings | (1,066,500) | (422,000) | ||||||||||
Total liabilities and equities | $ | (2,284,500) | $ | (1,391,000) | ||||||||
Wisconsin also paid $32,000 to a broker for arranging the transaction. In addition, Wisconsin paid $42,600 in stock issuance costs. Badgers equipment was actually worth $728,750, but its patented technology was valued at only $371,900.
What are the consolidated balances for the following accounts?
A. Net Income?
B. Retained earnings, 1/1/20 ?
C. Patented technology (net) ?
D. Goodwill ?
E. Liabilities ?
F. Common Stock ?
G. Additional paid in capital ?
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