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.
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