on june 30 Wisconsin issued 267350 in debt and 18400 new shares of its 10 par va

Question

on june 30 Wisconsin issued 267350 in debt and 18400 new shares of its 10 par value stock to Badger comp. owners in exchange for all the outstanding shares of that company Wisconsin shares had a fair value of 40 per share. Prior to the combination tha financial staemnts for wisconsin and badger for the 6 month period were as follows

                                   wisconsin      badger

Revenue                  ( 985000)         ( 339000)

Exspenses                 720000           201000

net income                (265000)        (138000)

retained earnings1/1    (843000)           (208000)

net income                 (265000)            (138000)

divdends declare            106250                0

Retained earnings 6/30    (1001750)        (346000)

cash                             110750              59000

recievable/Inv                 433000                 180000

Patented tech.(net)        929000                   372000

Equipment (net)             727000                   619000

total asset   2199750                              1230000

liabilites              (568000)                      (414000)

Common stock (360000)                        (200000)

Add. paid in capital (270000)                    (270000)

Retained earnings   (1001750)                (346000)

total liab/equity             (2199750)          (1230000)

note parewntheses indicate credit balance

wisconsin also paid 308000 to a broker for arranging the trasaction. In addition Wisconsin paid 43100 in stock issuance cost. Badgers equpiment was actually worth 756250, but its patented tech. was valued at only 350700 What are the consolidated balances for the following?

Net income

Retained earnings /1

patented tech.

goodwill

liability

common stock

additional paind in capital

Explanation / Answer

1 Net income 181350 because stock expenses and brokerage are paid out f cash (308000+43100-169750)

2 Retained earnings (1001750+181350) 1183100 it is assumed that net income is transferred to retained earnings

3 patented tech (929000+350700) 1279700

4 goodwill : cash ((110750-43100)+59000)

rececivables 433000+180000

Ptent (929000+350700)

equip (727000+756250)

Less : liabilities (414000)

less : purchase consideration (18400*40+267350)

Goodwill 71400

5 liability (568000+414000+267350) 1249350

6 common stcok (360000+184000) 544000

7 additional paid up capital (270000+(18400*30)-308000-43100) 470900

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.