Assignment
On June 30, 2011, 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, 2011, 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 paid . . . . . . . . . . . . . . . . . . . . . . . . . 90,000 -0-
Retained earnings, 6/30 . . . . . . . . . . . . . . . . . $ (950,000) $ (300,000)
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 80,000 $ 110,000
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?
a. Net income.
b. Retained earnings, 1/1/11.
c. Patented technology.
d. Goodwill.
e. Liabilities.
f. Common stock.
g. Additional paid-In capital.