Response to the following problem:
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.