esOn June 30, 2023, Wisconsin, Incorporated, issued $143,250 in debt and 24,100 new shares of its $10 par value stock to BadgerCompany owners in exchange for all of the outstanding shares of that company. Wisconsin shares had a fair value of $40 per share.Prior to the combination, the financial statements for Wisconsin and Badger for the six-month period ending June 30, 2023, were asfollows (credit balances in parentheses):RevenuesExpensesNet incomeItemsRetained earnings, 1/1Net incomeDividends declaredRetained earnings, 6/30CashReceivables and inventoryPatented technology (net)Equipment (net)Total assetsLiabilitiesCommon stockAdditional paid-in capitalRetained earningsTotal liabilities and equitiesWisconsin$ (1,083,000)746,000$ (337,000)$ (847,000)(337,000)110,000$ (1,074,000)$ 147,000441,000967,000705,000$ 2,260,000$ (556,000)(360,000)(270,000)(1,074,000)Badger$ (450,000)259,000$ (191,000)$ (274,000)(191,000)0$ (465,000)$ 153,000318,000320,000631,000$ 1,422,000$ (487,000)(200,000)(270,000)(465,000)$ (2,260,000) $ (1,422,000)Wisconsin also paid $35,500 to a broker for arranging the transaction. In addition, Wisconsin paid $46,000 in stock issuance costs.Badger's equipment was actually worth $771,250, but its patented technology was valued at only $292,800.Required:What are the consolidated balances for the following accounts?Note: Input all amounts as positive valuesAccountsAmountsa. Net income$528,000b. Retained earnings, 1/1/23$(1,121,000)c. Patented technology (net)$1,259,800d. Goodwill$644,000e. Liabilities$(1,043,000)f. Common stock$(560,000)g. Additional paid-in capital$(540,000)

Consolidation refers to the process of combining the financial statements of two or more separate…

Answered: Accounts Amounts a. Net income $…

Accounts Amounts a. Net income $ 528,000 b. Retained earnings, 1/1/23 $ (1,121,000) c. Patented technology (net) $ 1,259,800

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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On June 30, 2020, Wisconsin, Inc., issued $153,400 in debt and 22,200 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 $ (1,077,000) 759,000 $ (318,000) $(839,000) (318,000) 110,750 $(1,046, 250) Badger $ (397,000) 200,000 Revenues Expenses $ (197,000) $ (213,000) (197,000) Net income Retained earnings, 1/1 Net income Dividends declared Retained earnings, 6/30 $ (410,000) $ 197,250 423,000 915,000 737,000 $ 2,272,250 $ (596,000) (360,000) (270,000) (1,046, 250) $(2,272,250) Cash Receivables and inventory Patented technology (net) Equipment (net) 166,000 171,000 364,000 609,000 $ 1,310,000 $ (430,000) (200,000) (270,000) (410, 000) $(1,310,000) Total assets Liabilities Common…
On June 30, 2020, Wisconsin, Inc., issued $92,400 in debt and 23,400 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 $ (944,000 ) $ (443,000 ) Expenses 686,000 287,000 Net income $ (258,000 ) $ (156,000 ) Retained earnings, 1/1 $ (853,000 ) $ (207,000 ) Net income (258,000 ) (156,000 ) Dividends declared 110,000 0 Retained earnings, 6/30 $ (1,001,000 ) $ (363,000 ) Cash $ 58,000 $ 154,000 Receivables and inventory 442,000 171,000 Patented technology (net) 923,000 329,000 Equipment (net) 723,000 655,000 Total assets $ 2,146,000 $…
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On June 30, 2017, 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, 2017, 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 declared 90,000 –0– Retained earnings, 6/30 $ (950,000) $ (300,000) Cash $ 80,000 $ 110,000 page 81 Receivables and inventory 400,000 170,000 Patented technology (net) 900,000 300,000 Equipment (net) 700,000 600,000 Total assets…
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On January 1, 2020, Aguilar Corporation purchased bonds with a face value of P4,000,000 forP3,649,600 in order to collect contractual cash flows that are solely payments of principal and interest.The bonds are purchased to yield 10% interest. The nominal interest rate on the bonds is 8% payableannually every December 31.On December 31, 2021, as a result of a change in the business model for managing financial assets,the entity decided to reclassify the bonds from amortized cost to fair value. On that date, the carryingamount of the bond investment is P3,744,016 after discount amortization using the effective interestmethod. The market value of the bonds on January 1, 2015, is 10%. Requirements: 1. Preparethe necessary journal entries to record the transactions using the change is from fair value to amortized cost.
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