The financial statements for Campbell, Inc., and Newton Company for the year ended December 31, 2021, prior to the business combination whereby Campbell acquired Newton, are as follows (in thousands): Campbell Newton Revenues $ 2,600 $ 700 Expenses 1,880 400 Net income $ 720 $ 300 Retained earnings, 1/1 $ 2,400 $ 500 Net income 720 300 Dividends (270 ) 0 Retained earning, 12/31 $ 2,850 $ 800 Cash $ 240 $ 230 Receivables and inventory 1,200 360 Buildings (net) 2,700 650 Equipment (net) 2,100 1,300 Total assets $ 6,240 $ 2,540 Liabilities $ 1,500 $ 720 Common stock 1,080 400 Additional paid-in capital 810 620 Retained earnings 2,850 800 Total liabilities & stockholders' equity $ 6,240 $ 2,540 On December 31, 2021, Campbell obtained a loan for $650 and used the proceeds, along with the transfer of 35 shares of its $10 par value common stock, in exchange for all of Newton’s common stock. At the time of the transaction, Campbell’s common stock had a fair value of $40 per share. In connection with the business combination, Campbell paid $25 to a broker for arranging the transaction and $30 in stock issuance costs. At the time of the transaction, Newton’s equipment was actually worth $1,450 but its buildings were only valued at $590. Compute the consolidated cash account at December 31, 2021.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The financial statements for Campbell, Inc., and Newton Company for the year ended December 31, 2021, prior to the business combination whereby Campbell acquired Newton, are as follows (in thousands):

	Campbell		Newton
Revenues	$	2,600		$	700
Expenses		1,880			400
Net income	$	720		$	300
Retained earnings, 1/1	$	2,400		$	500
Net income		720			300
Dividends		(270	)		0
Retained earning, 12/31	$	2,850		$	800
Cash	$	240		$	230
Receivables and inventory		1,200			360
Buildings (net)		2,700			650
Equipment (net)		2,100			1,300
Total assets	$	6,240		$	2,540
Liabilities	$	1,500		$	720
Common stock		1,080			400
Additional paid-in capital		810			620
Retained earnings		2,850			800
Total liabilities & stockholders' equity	$	6,240		$	2,540

On December 31, 2021, Campbell obtained a loan for $650 and used the proceeds, along with the transfer of 35 shares of its $10 par value common stock, in exchange for all of Newton’s common stock. At the time of the transaction, Campbell’s common stock had a fair value of $40 per share.

In connection with the business combination, Campbell paid $25 to a broker for arranging the transaction and $30 in stock issuance costs. At the time of the transaction, Newton’s equipment was actually worth $1,450 but its buildings were only valued at $590.

Compute the consolidated cash account at December 31, 2021.

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