On June 30, 2017, Wisconsin, Inc., Issues $300,000 in debt and 15,000 new shares of its $10 par

value stock to Badger Company owners in exchange for all 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 $(900,000) $(300,000)

Expenses 660,000 200,000

NI (240,000) (100,000)

RE, 1/1 (800,000) (200,000)

NI (240,000) (100,000)

Dividends Declared 90,000 -

RE, 6/30 (950,000) (300,000)

Cash 80,000 110,000

Receivabkes and inv 400,000 170,000

PT (net) 900,000 300,000

Equipment (net) 700,000 600,000

Total Assets 2,080,000 1,180,000

Liabilities (500,000) (410,000)

CS (360,000) (200,000)

APIC (270,000) (270,000)

RE (950,000) (300,000)

Total liabilites and equities (2,080,000) (1,180,000)

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 values at only $280,000.

1. Prepare the entries for the acquisition.

2. Prepare the analysis showing the allocation of cost over book value and the computation of goodwill or gain on bargain purchase.

3. Complete the consolidated worksheet as of 1/1/2018.

4. REPEAT parts 1-3 above, assuming instead that Kennedy also had in-process research and development that had a fair value of $500,000. All other items remain the same.