Problem A (5 points)

Able, Inc. issued 50,000 new shares of common stock (valued at $4 per share) topurchase all of the outstanding stock for Washington corporation in a stock acquisition.Prior to the stock acquisition, the equity section of each company was:AbleWashingtonCommon Stock ($1 par value)$200,000$50,000Additional paid-in capital100,00020,000Retained earnings400,000100,000Total Equity$700,000$170,000Calculate the amounts of Additional Paid-in Capital and Retained Earnings thatshould be reported on a consolidated basis immediately after the stock acquisition?Make sure to show your calculations!!Problem B (10 points)

Basque Company acquires all of Dunham Company's assets and liabilities for cash on January 1, 2018.Dunham company is formally dissolved after the acquisition. At the acquisition date,the following book and fair values were available for the Dunham Company accounts:BookFairValuesValuesCurrent assets60,00060,000Building90,00080,000Land10,00030,000Trademark15,000Goodwill

15,000?Accounts Payable

(10,000)(10,000)

Other Liabilities

(30,000)(20,000)

Common Stock

(100,000)Retained Earnings

(35,000)Prepare Basque's entry to record its acquisition of Dunham assuming the following cash purchase amounts:A.$175,000B .$125,000