On June 30, 2017, Wisconsin, Inc., issued $300,000 in debt and 15,000 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 $ (900,000) $ (300,000) Expenses 660,000 200,000 Net income $ (240,000) $ (100,000) Retained earnings, 1/1 $ (800,000) $ (200,000) Net income (240,000) (100,000) Dividends declared 90,000 –0– Retained earnings, 6/30 $ (950,000) $ (300,000) Cash $ 80,000 $ 110,000 page 81 Receivables and inventory 400,000 170,000 Patented technology (net) 900,000 300,000 Equipment (net) 700,000 600,000 Total assets $ 2,080,000 $ 1,180,000 Liabilities $ (500,000) $ (410,000) Common stock (360,000) (200,000) Additional paid-in capital (270,000) (270,000) Retained earnings (950,000) (300,000) Total liabilities 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 valued at only $280,000. What are the consolidated balances for the following accounts? Net income. Retained earnings, 1/1/17. Patented technology
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On June 30, 2017, Wisconsin, Inc., issued $300,000 in debt and 15,000 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
$ (900,000)
$ (300,000)
Expenses
660,000
200,000
Net income
$ (240,000)
$ (100,000)
Retained earnings , 1/1$ (800,000)
$ (200,000)
Net income
(240,000)
(100,000)
Dividends declared
90,000
–0–
Retained earnings, 6/30
$ (950,000)
$ (300,000)
Cash
$ 80,000
$ 110,000
page 81Receivables and inventory
400,000
170,000
Patented technology (net)
900,000
300,000
Equipment (net)
700,000
600,000
Total assets
$ 2,080,000
$ 1,180,000
Liabilities
$ (500,000)
$ (410,000)
Common stock
(360,000)
(200,000)
Additional paid-in capital
(270,000)
(270,000)
Retained earnings
(950,000)
(300,000)
Total liabilities 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 valued at only $280,000.
What are the consolidated balances for the following accounts?
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Net income.
-
Retained earnings, 1/1/17.
-
Patented technology.
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Goodwill . -
Liabilities.
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Common stock.
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Additional paid-in capital.
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