Question
On June 30, 2017, Wisconsin, Inc., issued $315,450 in debt and 18,100 new shares of its $10 par value stock to Badger Company owners in
On June 30, 2017, Wisconsin, Inc., issued $315,450 in debt and 18,100 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 | $ | (985,000 | ) | $ | (462,000 | ) | ||||||
| Expenses | 707,000 | 293,000 | ||||||||||
| Net income | $ | (278,000 | ) | $ | (169,000 | ) | ||||||
| Retained earnings, 1/1 | $ | (801,000 | ) | $ | (236,000 | ) | ||||||
| Net income | (278,000 | ) | (169,000 | ) | ||||||||
| Dividends declared | 105,000 | 0 | ||||||||||
| Retained earnings, 6/30 | $ | (974,000 | ) | $ | (405,000 | ) | ||||||
| Cash | $ | 42,000 | $ | 79,000 | ||||||||
| Receivables and inventory | 413,000 | 216,000 | ||||||||||
| Patented technology (net) | 911,000 | 347,000 | ||||||||||
| Equipment (net) | 739,000 | 664,000 | ||||||||||
| Total assets | $ | 2,105,000 | $ | 1,306,000 | ||||||||
| Liabilities | $ | (501,000 | ) | $ | (431,000 | ) | ||||||
| Common stock | (360,000 | ) | (200,000 | ) | ||||||||
| Additional paid-in capital | (270,000 | ) | (270,000 | ) | ||||||||
| Retained earnings | (974,000 | ) | (405,000 | ) | ||||||||
| Total liabilities and equities | $ | (2,105,000 | ) | $ | (1,306,000 | ) | ||||||
Wisconsin also paid $39,700 to a broker for arranging the transaction. In addition, Wisconsin paid $41,600 in stock issuance costs. Badgers equipment was actually worth $796,750, but its patented technology was valued at only $322,900.
What are the consolidated balances for the following accounts? (Input all amounts as positive values)
Accounts
a.Net income.
b.Retained earnings, 1/1/17
.c.Patented technology.
d.Goodwill.
e.Liabilities.
f.Common stock.
g.Additional paid-in capital.
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Managing The Audit Function A Corporate Audit Department Procedures Guide
Authors: Michael P. Cangemi, Tommie W. Singleton
3rd Edition
0471281190, 978-0471281191
