On January 1, 2023, Mona, Incorporated, acquired 80 percent of Lisa Company’s common stock as well as 60 percent of its preferred shares. Mona paid $82,000 in cash for the preferred stock, with a call value of 110 percent of the $50 per share par value.
On January 1, 2023, Mona, Incorporated, acquired 80 percent of Lisa Company’s common stock as well as 60 percent of its
On January 2, 2023, Mona acquired one-half of Lisa's outstanding bonds payable to reduce the business combination's debt position. Lisa's bonds had a face value of $100,000 and paid cash interest of 8 percent per year. These bonds had been issued to the public to yield 10 percent. Interest is paid each December 31. On January 2, 2023, these bonds had a total $93,660 carrying amount. Mona paid $53,465, indicating an effective interest rate of 6 percent.
On January 3, 2023, Mona sold Lisa fixed assets that had originally cost $117,000 but had
The individual financial statements for these two companies for the year ending December 31, 2024, are as follows:
| Accounts | Mona, Incorporated | Lisa Company |
|---|---|---|
| Sales and other revenues | $ (534,000) | $ (234,000) |
| Expenses | 237,000 | 137,000 |
| Dividend income—Lisa common stock | (21,600) | 0 |
| Dividend income—Lisa preferred stock | (15,000) | 0 |
| Net income | $ (333,600) | $ (97,000) |
| $ (717,000) | $ (534,000) | |
| Net income (above) | (333,600) | (97,000) |
| Dividends declared—common stock | 109,800 | 27,000 |
| Dividends declared—preferred stock | 0 | 25,000 |
| Retained earnings, 12/31/24 | $ (940,800) | $ (579,000) |
| Current assets | $ 147,419 | $ 517,000 |
| Investment in Lisa—common stock | 588,000 | 0 |
| Investment in Lisa—preferred stock | 82,000 | 0 |
| Investment in Lisa—bonds | 51,833 | 0 |
| Fixed assets | 1,117,000 | 817,000 |
| Accumulated depreciation | (317,000) | (217,000) |
| Total assets | $ 1,669,252 | $ 1,117,000 |
| Accounts payable | $ (411,452) | $ (107,472) |
| Bonds payable | 0 | (100,000) |
| Discount on bonds payable | 0 | 3,472 |
| Common stock | (317,000) | (217,000) |
| Preferred stock | 0 | (117,000) |
| Retained earnings, 12/31/24 | (940,800) | (579,000) |
| Total liabilities and equities | $ (1,669,252) | $ (1,117,000) |
Note: Credits are indicated by parentheses.
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Assume that consolidated financial statements are being prepared for the year ending December 31, 2024. Calculate the consolidated balance for each of the following accounts:
- Franchises
- Fixed Assets
- Accumulated Depreciation
- Expenses
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