50.1K

Verified Solution

Link Copied!

On June 30, 2020, Wisconsin, Inc., issued $358,600 in debt and 17,500 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):

	Wisconsin				Badger
Revenues	$	(1,021,000	)		$	(411,000	)
Expenses		692,000				223,000
Net income	$	(329,000	)		$	(188,000	)
Retained earnings, 1/1	$	(888,000	)		$	(228,000	)
Net income		(329,000	)			(188,000	)
Dividends declared		114,750				0
Retained earnings, 6/30	$	(1,102,250	)		$	(416,000	)
Cash	$	142,250			$	127,000
Receivables and inventory		434,000				267,000
Patented technology (net)		940,000				345,000
Equipment (net)		787,000				614,000
Total assets	$	2,303,250			$	1,353,000
Liabilities	$	(571,000	)		$	(467,000	)
Common stock		(360,000	)			(200,000	)
Additional paid-in capital		(270,000	)			(270,000	)
Retained earnings		(1,102,250	)			(416,000	)
Total liabilities and equities	$	(2,303,250	)		$	(1,353,000	)

Wisconsin also paid $38,600 to a broker for arranging the transaction. In addition, Wisconsin paid $42,000 in stock issuance costs. Badgers equipment was actually worth $759,500, but its patented technology was valued at only $318,500.

What are the consolidated balances for the following accounts? (Input all amounts as positive values)

Answer & Explanation Solved by verified expert

See Answer