On June 30, 2020, Wisconsin, Inc., Issued $158,100 in debt and 21,600 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, 2020, were as follows (credit balances in parentheses)
On June 30, 2020, Wisconsin, Inc., Issued $158,100 in debt and 21,600 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, 2020, were as follows (credit balances in parentheses)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:On June 30, 2020, Wisconsin, Inc., issued $158,100 in debt and 21,600 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, 2020, were as follows (credit
balances in parentheses):
Revenues
Expenses
Net income
Retained earnings, 1/1
Net income
Dividends declared
Retained earnings, 6/30
Cash
Receivables and inventory
Patented technology (net)
Equipment (net)
Total assets
Liabilities
Common stock
Additional paid-in capital
Retained earnings
Total liabilities and equities
Accounts
a.Net income
b. Retained earnings. 1/1/20
e Patented technology (net)
d. Goodwill
Liabilities
Common stock
9. Additional paid-in capital
Wisconsin
S (983,000)
687,000
Amounts
$ (296,000)
$
(892,000)
(296,000)
102,250
$(1,085,750)
$ 187,750
418,000
987,000
706,000
$ 2,298,750
3 (583,000)
(160,000)
(270,000)
(1,085,758)
$(2,298,750)
Badger
$ (448,000)
286,000
$ (162,000)
$(253,000)
(162,000)
$
$
Wisconsin also paid $31,600 to a broker for arranging the transaction. In addition, Wisconsin paid $45.600 in stock Issuance costs.
Badger's equipment was actually worth $703,000, but its patented technology was valued at only $304.900.
What are the consolidated balances for the following accounts? (Input all amounts as positive values)
(415,000)
259,000
174,000
3,000
601,000
$1,367,000
$(482,000)
(200,000)
(270,000)
(415,000)
$(1,167,000)
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Step 1: Introduction to Consolidation
VIEWStep 2: (a) Determination of consolidated balance of net income:
VIEWStep 3: (b) Determination of consolidated balance of Retained earnings, 1/1/20:
VIEWStep 4: (c) Determine the consolidated balance of Patented technology (net):
VIEWStep 5: (d) Calculation of consolidated balance of goodwill
VIEWStep 6: (e) Calculation of consolidated liabilities
VIEWStep 7: (f) Calculation of common stock
VIEWStep 8: (g) Calculation of additional paid-in capital
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