Problems 15 through 18 are based on the following information:On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $40 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.On its acquisition-date consolidated balance sheet, what amount should TruData report as retained earnings as of July 1?a. $130,000b. $210,000c. $260,000d. $510,000 TruDataWebstatWebstatBook ValuesBook ValuesFalr ValuesRevenues (1/1 to 7/1). .Expenses (1/1 to 7/1).Retained earnings, 1/1.Cash and receivables.$(250,000)170,000(130,000)140,000190,000230,000400,000100,000(540,000)(300,000)(10,000)$(130,000)80,000(150,000)60,000$ 60,000Inventory...Patented technology (net).Land.......Buildings and equipment (net)145,000180,000175,000200,000225,000200,00075,000(360,000)(70,000)(30,000)75,000Liabilities....(350,000)Common stockAdditional paid-in capital....

Retained earnings: Retained earnings are the portion of earnings kept by the business for the…

Answered: TruData Webstat Webstat Book Values…

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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Problems 15 through 18 are based on the following information:
On July 1, TruData Company issues 10,000 shares of its common stock with a $5 par value and a $40 fair value in exchange for all of Webstat Company’s outstanding voting shares. Webstat’s precombination book and fair values are shown below along with book values for TruData’s accounts.
On its acquisition-date consolidated balance sheet, what amount should TruData report as retained earnings as of July 1?
a. $130,000
b. $210,000
c. $260,000
d. $510,000

TruData
Webstat
Webstat
Book Values
Book Values
Falr Values
Revenues (1/1 to 7/1). .
Expenses (1/1 to 7/1).
Retained earnings, 1/1.
Cash and receivables.
$(250,000)
170,000
(130,000)
140,000
190,000
230,000
400,000
100,000
(540,000)
(300,000)
(10,000)
$(130,000)
80,000
(150,000)
60,000
$ 60,000
Inventory...
Patented technology (net).
Land.......
Buildings and equipment (net)
145,000
180,000
175,000
200,000
225,000
200,000
75,000
(360,000)
(70,000)
(30,000)
75,000
Liabilities....
(350,000)
Common stock
Additional paid-in capital....

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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