Winston has the following account balances as of Feb 1:
Inventory $600,000.00
Land $50,000.00
Buildings (net) (valued at $1,000,000) $900,000.00
Common stock ($10 per value) $(800,000.00)
Retained earnings 1/1 $(1,100,000.00)
Revenues $(600,000.00)
Expenses $500,000.00
Q1. Arlington pays $1.4 million cash and issues 10,000 shares of its $30 per value common stock (valued at $80 per share) for all of Winston's outstanding stock. Stock issuance costs amount to $30,000. Prior to recording these newly issued shares, Arlington reports a Common stock account of $900,000 and Additional Paid-In Capital of $500,000. For each of the following accounts, determine what balance would be included in a Feb 1 consolidation:
a) Goodwill
b) Expenses
c) Retained Earnings 1/1
d) Buildings
Q2. Assume that Arlingtion pays cash of $2.3 million. No stock is issued. An additional $40,000 is paid in direct combination costs. For each of the follwing accounts, determine what balance would be included in a Feb 1 consolidation:
a) Goodwill
b) Expenses
c) Retained Earnings 1/1
d) Buildings