On July 1, TruData Company issues 10,200 shares of its common stock with a $5 par value and a $50 fairvalue in exchange for all of Webstat Company's outstanding voting shares. Webstat's precombinationbook and fair values are shown below along with book values for TruData's accounts.Revenues (1/1 to 7/1)Expenses (1/1 to 7/1)Retained earnings, 1/1Cash and receivablesInventoryPatented technology (net)LandBuildings and equipment (net)LiabilitiesCommon stockAdditional paid-in capitalWebstatWebstatBook Values Book Values Fair Values$ (309,200)196,000(122,000)162,000164,000224,000398,00088,000(500,000)(292,000)(8,800)TruData$ (162,000)94,000(154,000)62,000162,000190,000208,00090,000(376,000)(78,000)(36,000)$62,000180,000204,000236,00090,000(354,000)On its acquisition-date consolidated balance sheet, what amount should TruData report as retained earnings as ofJuly 1?

Retained Earning to be reported by TruData as of July 1 can be calculated from the following…

Answered: On July 1, TruData Company issues…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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