Question

On June 30, 2020, Wisconsin, Inc., issued $181,400 in debt and 23,100 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, 2020, were as follows (credit balances in parentheses): Revenues Expenses Net income Retained earnings, 1/1 Net income Dividends declared Retained earnings, 6/30 Cash Receivables and inventory Patented technology (net) Equipment (net) Total assets Liabilities Common stock Additional paid-in capital Retained earnings Total liabilities and equities Wisconsin $(1,043, 000) 742,000 $ (301, 000) (825, 000) (301, 000) 94,500 $(1,031,500) 101,500 451,000 931,000 705,000 $ 2, 188,500 $ (527,000) (360,000) (270,000) (1,031,500) $(2,188,500) Badger $ (453,000) 294,000 $ (159,000) (264,000) (159,000) 0 $ (423,000) 88,000 215,000 374,000 661,000 $ 1,338,000 $ (445,000) (200,000) (270,000) (423,000) $(1,338,000) Wisconsin also paid $32,700 to a broker for arranging the transaction. In addition, Wisconsin paid $46,800 in stock issuance costs. Badger's equipment was actually worth $833,500, but its patented technology was valued at only $344,100. What are the consolidated balances for the following accounts? (Input all amounts as positive values)

Answer 1

	Amount in $
a.)	Net Income	268,300	(301,000 - 32,700)
b.)	Retained earnings 1/1/20	825,000
c.)	Patented technology (net)	1,275,100	(931,000 + 344,100 )
d.)	Goodwill	69,800	Working below
e.)	Liabilities	1,153,400	(527,000 + 445,000 + 181,400)
f.)	Common stock	591,000	(360,000 + ( 23,100 x 10 ) )
g.)	Additional paid in capital	916,200	(270,000 + ( 23,100 x 30 ) - 46,800)

Working
Goodwill		Amount in $
Purchase Consideration		1,105,400
(181,400 + ( 23,100 x 40 ) )
Less: Net assets		1,035,600
Book value	893,000
(200,000 + 270,000 + 423,000 )
Add: Fair value in excess of book value of Equipment	172,500
(833,500 - 661,000)
Less: Fair value in short of book value of patented technology	29,900
( 374,000 - 344,100)
Goodwill		69,800