Find the consolidated balances for the following accounts. a. Net income b. Retained earnings , 1/1/17 c. Patented technology d. Goodwill e. Liabilities f. Common stock g. Additional paid-in capital.

Question

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Answer 1

Question

Chapter 2, Problem 26P

To determine

Find the consolidated balances for the following accounts.

a. Net income

b. Retained earnings, 1/1/17

c. Patented technology

d. Goodwill

e. Liabilities

f. Common stock

g. Additional paid-in capital.

Expert Solution & Answer

Answer to Problem 26P

	Accounts	Consolidated value
a.	Net income	$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000
c.	Patented technology	$ 1,180,000
d.	Goodwill	$ 50,000
e.	Liabilities	$ 1,210,000
f.	Common stock	$ 510,000
g.	Additional paid-in capital	$ 680,000

Table: (1)

Explanation of Solution

The consolidated balances are as follows:

	Accounts	Book values in Company P	Fair values in Company S	Consolidated value
a.	Net income (1)			$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000		$ 800,000
c.	Patented technology	$ 900,000	$ 280,000	$ 1,180,000
d.	Goodwill (2)			$ 50,000
e.	Liabilities (3)	$ 500,000	$ 410,000	$ 1,210,000
f.	Common stock (4)			$ 510,000
g.	Additional paid-in capital (5)			$ 680,000

Table: (2)

Working note:

Computation of net income:

Net income = Net income in books of Company W − Broker's fees= $240,000 − $30,000= $210,000 (1)

Computation of Goodwill:

Particulars	Amount	Amount
Consideration paid ($300,000) + (15,000 × $40)		$ 900,000
Cash	$ 110,000
Receivables	$ 170,000
Patented Technology (net)	$ 280,000
Equipment (net)	$ 700,000
Liabilities	$ (410,000)
Fair value of net identifiable assets		$ 850,000
Goodwill		$ 80,000 (2)

Table: (3)

Computation of liabilities:

Liabilities = Liabilities in the books of Company W + Debt issued + Liabilities in the books of Company B= $500,000 + $410,000+ $300,000= $1,210,000 (3)

Computation of Common Stock:

Common stock = Common stock in the books of Company W + Stock issued= $360,000 + (15,000 × $10) = $510,000 (4)

Computation of Additional paid-in capital:

Additional paid-in capital = Additional paid-in capital in the books of Company W + Additional paid-in capital on stock issued − Stock issue costs= $270,000 + (15,000 × $30) − $40,000 = $680,000 (5)

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Answer 2

Question

Chapter 2, Problem 26P

To determine

Find the consolidated balances for the following accounts.

a. Net income

b. Retained earnings, 1/1/17

c. Patented technology

d. Goodwill

e. Liabilities

f. Common stock

g. Additional paid-in capital.

Expert Solution & Answer

Answer to Problem 26P

	Accounts	Consolidated value
a.	Net income	$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000
c.	Patented technology	$ 1,180,000
d.	Goodwill	$ 50,000
e.	Liabilities	$ 1,210,000
f.	Common stock	$ 510,000
g.	Additional paid-in capital	$ 680,000

Table: (1)

Explanation of Solution

The consolidated balances are as follows:

	Accounts	Book values in Company P	Fair values in Company S	Consolidated value
a.	Net income (1)			$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000		$ 800,000
c.	Patented technology	$ 900,000	$ 280,000	$ 1,180,000
d.	Goodwill (2)			$ 50,000
e.	Liabilities (3)	$ 500,000	$ 410,000	$ 1,210,000
f.	Common stock (4)			$ 510,000
g.	Additional paid-in capital (5)			$ 680,000

Table: (2)

Working note:

Computation of net income:

Net income = Net income in books of Company W − Broker's fees= $240,000 − $30,000= $210,000 (1)

Computation of Goodwill:

Particulars	Amount	Amount
Consideration paid ($300,000) + (15,000 × $40)		$ 900,000
Cash	$ 110,000
Receivables	$ 170,000
Patented Technology (net)	$ 280,000
Equipment (net)	$ 700,000
Liabilities	$ (410,000)
Fair value of net identifiable assets		$ 850,000
Goodwill		$ 80,000 (2)

Table: (3)

Computation of liabilities:

Liabilities = Liabilities in the books of Company W + Debt issued + Liabilities in the books of Company B= $500,000 + $410,000+ $300,000= $1,210,000 (3)

Computation of Common Stock:

Common stock = Common stock in the books of Company W + Stock issued= $360,000 + (15,000 × $10) = $510,000 (4)

Computation of Additional paid-in capital:

Additional paid-in capital = Additional paid-in capital in the books of Company W + Additional paid-in capital on stock issued − Stock issue costs= $270,000 + (15,000 × $30) − $40,000 = $680,000 (5)

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Answer 3

Question

Chapter 2, Problem 26P

To determine

Find the consolidated balances for the following accounts.

a. Net income

b. Retained earnings, 1/1/17

c. Patented technology

d. Goodwill

e. Liabilities

f. Common stock

g. Additional paid-in capital.

Expert Solution & Answer

Answer to Problem 26P

	Accounts	Consolidated value
a.	Net income	$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000
c.	Patented technology	$ 1,180,000
d.	Goodwill	$ 50,000
e.	Liabilities	$ 1,210,000
f.	Common stock	$ 510,000
g.	Additional paid-in capital	$ 680,000

Table: (1)

Explanation of Solution

The consolidated balances are as follows:

	Accounts	Book values in Company P	Fair values in Company S	Consolidated value
a.	Net income (1)			$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000		$ 800,000
c.	Patented technology	$ 900,000	$ 280,000	$ 1,180,000
d.	Goodwill (2)			$ 50,000
e.	Liabilities (3)	$ 500,000	$ 410,000	$ 1,210,000
f.	Common stock (4)			$ 510,000
g.	Additional paid-in capital (5)			$ 680,000

Table: (2)

Working note:

Computation of net income:

Net income = Net income in books of Company W − Broker's fees= $240,000 − $30,000= $210,000 (1)

Computation of Goodwill:

Particulars	Amount	Amount
Consideration paid ($300,000) + (15,000 × $40)		$ 900,000
Cash	$ 110,000
Receivables	$ 170,000
Patented Technology (net)	$ 280,000
Equipment (net)	$ 700,000
Liabilities	$ (410,000)
Fair value of net identifiable assets		$ 850,000
Goodwill		$ 80,000 (2)

Table: (3)

Computation of liabilities:

Liabilities = Liabilities in the books of Company W + Debt issued + Liabilities in the books of Company B= $500,000 + $410,000+ $300,000= $1,210,000 (3)

Computation of Common Stock:

Common stock = Common stock in the books of Company W + Stock issued= $360,000 + (15,000 × $10) = $510,000 (4)

Computation of Additional paid-in capital:

Additional paid-in capital = Additional paid-in capital in the books of Company W + Additional paid-in capital on stock issued − Stock issue costs= $270,000 + (15,000 × $30) − $40,000 = $680,000 (5)

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Answer 4

Question

Chapter 2, Problem 26P

To determine

Find the consolidated balances for the following accounts.

a. Net income

b. Retained earnings, 1/1/17

c. Patented technology

d. Goodwill

e. Liabilities

f. Common stock

g. Additional paid-in capital.

Expert Solution & Answer

Answer to Problem 26P

	Accounts	Consolidated value
a.	Net income	$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000
c.	Patented technology	$ 1,180,000
d.	Goodwill	$ 50,000
e.	Liabilities	$ 1,210,000
f.	Common stock	$ 510,000
g.	Additional paid-in capital	$ 680,000

Table: (1)

Explanation of Solution

The consolidated balances are as follows:

	Accounts	Book values in Company P	Fair values in Company S	Consolidated value
a.	Net income (1)			$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000		$ 800,000
c.	Patented technology	$ 900,000	$ 280,000	$ 1,180,000
d.	Goodwill (2)			$ 50,000
e.	Liabilities (3)	$ 500,000	$ 410,000	$ 1,210,000
f.	Common stock (4)			$ 510,000
g.	Additional paid-in capital (5)			$ 680,000

Table: (2)

Working note:

Computation of net income:

Net income = Net income in books of Company W − Broker's fees= $240,000 − $30,000= $210,000 (1)

Computation of Goodwill:

Particulars	Amount	Amount
Consideration paid ($300,000) + (15,000 × $40)		$ 900,000
Cash	$ 110,000
Receivables	$ 170,000
Patented Technology (net)	$ 280,000
Equipment (net)	$ 700,000
Liabilities	$ (410,000)
Fair value of net identifiable assets		$ 850,000
Goodwill		$ 80,000 (2)

Table: (3)

Computation of liabilities:

Liabilities = Liabilities in the books of Company W + Debt issued + Liabilities in the books of Company B= $500,000 + $410,000+ $300,000= $1,210,000 (3)

Computation of Common Stock:

Common stock = Common stock in the books of Company W + Stock issued= $360,000 + (15,000 × $10) = $510,000 (4)

Computation of Additional paid-in capital:

Additional paid-in capital = Additional paid-in capital in the books of Company W + Additional paid-in capital on stock issued − Stock issue costs= $270,000 + (15,000 × $30) − $40,000 = $680,000 (5)

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Answer 5

Chapter 2, Problem 26P

To determine

Find the consolidated balances for the following accounts.

a. Net income

b. Retained earnings, 1/1/17

c. Patented technology

d. Goodwill

e. Liabilities

f. Common stock

g. Additional paid-in capital.

Expert Solution & Answer

Answer to Problem 26P

	Accounts	Consolidated value
a.	Net income	$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000
c.	Patented technology	$ 1,180,000
d.	Goodwill	$ 50,000
e.	Liabilities	$ 1,210,000
f.	Common stock	$ 510,000
g.	Additional paid-in capital	$ 680,000

Table: (1)

Explanation of Solution

The consolidated balances are as follows:

	Accounts	Book values in Company P	Fair values in Company S	Consolidated value
a.	Net income (1)			$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000		$ 800,000
c.	Patented technology	$ 900,000	$ 280,000	$ 1,180,000
d.	Goodwill (2)			$ 50,000
e.	Liabilities (3)	$ 500,000	$ 410,000	$ 1,210,000
f.	Common stock (4)			$ 510,000
g.	Additional paid-in capital (5)			$ 680,000

Table: (2)

Working note:

Computation of net income:

Net income = Net income in books of Company W − Broker's fees= $240,000 − $30,000= $210,000 (1)

Computation of Goodwill:

Particulars	Amount	Amount
Consideration paid ($300,000) + (15,000 × $40)		$ 900,000
Cash	$ 110,000
Receivables	$ 170,000
Patented Technology (net)	$ 280,000
Equipment (net)	$ 700,000
Liabilities	$ (410,000)
Fair value of net identifiable assets		$ 850,000
Goodwill		$ 80,000 (2)

Table: (3)

Computation of liabilities:

Liabilities = Liabilities in the books of Company W + Debt issued + Liabilities in the books of Company B= $500,000 + $410,000+ $300,000= $1,210,000 (3)

Computation of Common Stock:

Common stock = Common stock in the books of Company W + Stock issued= $360,000 + (15,000 × $10) = $510,000 (4)

Computation of Additional paid-in capital:

Additional paid-in capital = Additional paid-in capital in the books of Company W + Additional paid-in capital on stock issued − Stock issue costs= $270,000 + (15,000 × $30) − $40,000 = $680,000 (5)

Answer 6

Chapter 2, Problem 26P

To determine

Find the consolidated balances for the following accounts.

a. Net income

b. Retained earnings, 1/1/17

c. Patented technology

d. Goodwill

e. Liabilities

f. Common stock

g. Additional paid-in capital.

Expert Solution & Answer

Answer to Problem 26P

	Accounts	Consolidated value
a.	Net income	$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000
c.	Patented technology	$ 1,180,000
d.	Goodwill	$ 50,000
e.	Liabilities	$ 1,210,000
f.	Common stock	$ 510,000
g.	Additional paid-in capital	$ 680,000

Table: (1)

Explanation of Solution

The consolidated balances are as follows:

	Accounts	Book values in Company P	Fair values in Company S	Consolidated value
a.	Net income (1)			$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000		$ 800,000
c.	Patented technology	$ 900,000	$ 280,000	$ 1,180,000
d.	Goodwill (2)			$ 50,000
e.	Liabilities (3)	$ 500,000	$ 410,000	$ 1,210,000
f.	Common stock (4)			$ 510,000
g.	Additional paid-in capital (5)			$ 680,000

Table: (2)

Working note:

Computation of net income:

Net income = Net income in books of Company W − Broker's fees= $240,000 − $30,000= $210,000 (1)

Computation of Goodwill:

Particulars	Amount	Amount
Consideration paid ($300,000) + (15,000 × $40)		$ 900,000
Cash	$ 110,000
Receivables	$ 170,000
Patented Technology (net)	$ 280,000
Equipment (net)	$ 700,000
Liabilities	$ (410,000)
Fair value of net identifiable assets		$ 850,000
Goodwill		$ 80,000 (2)

Table: (3)

Computation of liabilities:

Liabilities = Liabilities in the books of Company W + Debt issued + Liabilities in the books of Company B= $500,000 + $410,000+ $300,000= $1,210,000 (3)

Computation of Common Stock:

Common stock = Common stock in the books of Company W + Stock issued= $360,000 + (15,000 × $10) = $510,000 (4)

Computation of Additional paid-in capital:

Additional paid-in capital = Additional paid-in capital in the books of Company W + Additional paid-in capital on stock issued − Stock issue costs= $270,000 + (15,000 × $30) − $40,000 = $680,000 (5)

Answer 7

Chapter 2, Problem 26P

To determine

Find the consolidated balances for the following accounts.

a. Net income

b. Retained earnings, 1/1/17

c. Patented technology

d. Goodwill

e. Liabilities

f. Common stock

g. Additional paid-in capital.

Answer 8

Expert Solution & Answer

Answer to Problem 26P

	Accounts	Consolidated value
a.	Net income	$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000
c.	Patented technology	$ 1,180,000
d.	Goodwill	$ 50,000
e.	Liabilities	$ 1,210,000
f.	Common stock	$ 510,000
g.	Additional paid-in capital	$ 680,000

Table: (1)

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The consolidated balances are as follows:

	Accounts	Book values in Company P	Fair values in Company S	Consolidated value
a.	Net income (1)			$ 210,000
b.	Retained earnings, 1/1/17	$ 800,000		$ 800,000
c.	Patented technology	$ 900,000	$ 280,000	$ 1,180,000
d.	Goodwill (2)			$ 50,000
e.	Liabilities (3)	$ 500,000	$ 410,000	$ 1,210,000
f.	Common stock (4)			$ 510,000
g.	Additional paid-in capital (5)			$ 680,000

Table: (2)

Working note:

Computation of net income:

Net income = Net income in books of Company W − Broker's fees= $240,000 − $30,000= $210,000 (1)

Computation of Goodwill:

Particulars	Amount	Amount
Consideration paid ($300,000) + (15,000 × $40)		$ 900,000
Cash	$ 110,000
Receivables	$ 170,000
Patented Technology (net)	$ 280,000
Equipment (net)	$ 700,000
Liabilities	$ (410,000)
Fair value of net identifiable assets		$ 850,000
Goodwill		$ 80,000 (2)

Table: (3)

Computation of liabilities:

Liabilities = Liabilities in the books of Company W + Debt issued + Liabilities in the books of Company B= $500,000 + $410,000+ $300,000= $1,210,000 (3)

Computation of Common Stock:

Common stock = Common stock in the books of Company W + Stock issued= $360,000 + (15,000 × $10) = $510,000 (4)

Computation of Additional paid-in capital:

Additional paid-in capital = Additional paid-in capital in the books of Company W + Additional paid-in capital on stock issued − Stock issue costs= $270,000 + (15,000 × $30) − $40,000 = $680,000 (5)

Answer 12

Ch. 2 - Prob. 1Q Ch. 2 - Prob. 2Q Ch. 2 - What does the term consolidated financial...Ch. 2 - Within the consolidation process, what is the...Ch. 2 - Prob. 5Q Ch. 2 - Prob. 6Q Ch. 2 - Prob. 7Q Ch. 2 - Prob. 8Q Ch. 2 - Prob. 9Q Ch. 2 - Prob. 10Q

Find the consolidated balances for the following accounts. a. Net income b. Retained earnings , 1/1/17 c. Patented technology d. Goodwill e. Liabilities f. Common stock g. Additional paid-in capital.

Concept explainers

Find the consolidated balances for the following accounts.

a. Net income

b. Retained earnings, 1/1/17

c. Patented technology

d. Goodwill

e. Liabilities

f. Common stock

g. Additional paid-in capital.

Answer to Problem 26P

Explanation of Solution

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Chapter 2 Solutions

Find the consolidated balances for the following accounts. a. Net income b. Retained earnings , 1/1/17 c. Patented technology d. Goodwill e. Liabilities f. Common stock g. Additional paid-in capital.

Concept explainers

Find the consolidated balances for the following accounts. a. Net income b. Retained earnings, 1/1/17 c. Patented technology d. Goodwill e. Liabilities f. Common stock g. Additional paid-in capital.

Answer to Problem 26P

Explanation of Solution

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Chapter 2 Solutions

Find the consolidated balances for the following accounts.

a. Net income

b. Retained earnings, 1/1/17

c. Patented technology

d. Goodwill

e. Liabilities

f. Common stock

g. Additional paid-in capital.