Richland Company acquires Seameyer, Inc., by issuing 20,000 shares of $1 par common stock with a market price of $25 per share on the acquisition date and paying $100,000 cash. The assets and liabilities on Seameyer's balance sheet were valued at fair values except equipment that was undervalued by $175,000. There was also an unrecorded patent valued at $32,500, as well as an unrecorded trademark valued at $80,000. In addition, the agreement provided for additional consideration, valued at $60,000, if certain earnings targets were met.
The pre-acquisition balance sheets for the two companies at acquisition date are presented below.
|
|
Richland
|
Seameyer
|
|
Cash
|
mce_markernbsp; 130,550
|
mce_markernbsp; 17,300
|
|
Accounts receivable
|
64,000
|
116,000
|
|
Inventory
|
97,000
|
149,000
|
|
Property, plant, and equipment
|
1,611,050
|
179,350
|
|
|
$1,902,600
|
$461,650
|
|
|
|
|
|
Accounts payable
|
mce_markernbsp; 31,350
|
$ 21,150
|
|
Salaries and taxes payable
|
24,530
|
36,800
|
|
Notes payable
|
550,000
|
100,000
|
|
Common stock
|
110,000
|
30,000
|
|
Additional paid-in capital
|
850,000
|
37,500
|
|
Retained earnings
|
336,720
|
236,200
|
|
|
$1,902,600
|
$461,650
|
1. Compute the consolidated balance in Cash.
2. Compute consolidated common stock.
3. Compute consolidated additional paid-in capital.
What amount of goodwill was recorded in the acquisition?