Problem 04-12 (LO2)

The condensed financial statements for OIL Inc. and ERS Company for the year ended December 31, Year 5, follow:

OILERSRevenues$906,000$304,000Expenses662,000202,000Net income$244,000$102,000Retained earnings, 1/1/Year 5$802,000$202,000Net income244,000102,000Dividends paid92,0000Retained earnings, 12/31/Year 5$954,000$304,000Cash$82,000$112,000Receivables and inventory402,000172,000Patented technology (net)902,000303,000Equipment (net)702,000602,000Total assets$2,088,000$1,189,000Liabilities$602,000$413,000Common shares532,000472,000Retained earnings954,000304,000Total liabilities and equities$2,088,000$1,189,000

On December 31, Year 5, after the above figures were prepared, OIL issued $242,000 in debt and 11,000 new shares to the owners of ERS for 80% of the outstanding shares of that company. OIL shares had a fair value of $42 per share.

OIL also paid $32,000 to a broker for arranging the transaction. In addition, OIL paid $34,000 in stock issuance costs. ERS's equipment was actually worth $694,000, but its patented technology was appraised at only $282,000.

Required:

What are the consolidated balances for the year ended/at December 31, Year 5, for the following accounts?

(a)Net income

OIL's net income considered in the Consolidated Financial Statement$

(b)Retained earnings, 1/1/Year 5

OIL's retained earnings in the Financial statement for Consolidation$

(c)Equipment

Value of equipment after acquisition$

(d)Patented technology

Value of patent after acquisition$

(e)Goodwill

Goodwill$

(f)Liabilities

Total liabilitiesafter acquisition$

(g)Common shares

Total value of common shares after acquisition$

(h)Non-controlling interests

Total value of non-controlling interestafter acquisition$