Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260008722
Author: Hoyle
Publisher: MCG
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Question
Chapter 2, Problem 26P
To determine
Find the consolidated balances for the following accounts.
a. Net income
b.
c. Patented technology
d.
e. Liabilities
f. Common stock
g. Additional paid-in capital.
Expert Solution & Answer
Answer to Problem 26P
| Accounts | Consolidated value | |
| a. | Net income | $ 210,000 |
| b. | Retained earnings, 1/1/17 | $ 800,000 |
| c. | Patented technology | $ 1,180,000 |
| d. | Goodwill | $ 50,000 |
| e. | Liabilities | $ 1,210,000 |
| f. | Common stock | $ 510,000 |
| g. | Additional paid-in capital | $ 680,000 |
Table: (1)
Explanation of Solution
The consolidated balances are as follows:
| Accounts | Book values in Company P | Fair values in Company S | Consolidated value | |
| a. | Net income (1) | $ 210,000 | ||
| b. | Retained earnings, 1/1/17 | $ 800,000 | $ 800,000 | |
| c. | Patented technology | $ 900,000 | $ 280,000 | $ 1,180,000 |
| d. | Goodwill (2) | $ 50,000 | ||
| e. | Liabilities (3) | $ 500,000 | $ 410,000 | $ 1,210,000 |
| f. | Common stock (4) | $ 510,000 | ||
| g. | Additional paid-in capital (5) | $ 680,000 |
Table: (2)
Working note:
Computation of net income:
Computation of Goodwill:
| Particulars | Amount | Amount |
|
Consideration paid | $ 900,000 | |
| Cash | $ 110,000 | |
| Receivables | $ 170,000 | |
| Patented Technology (net) | $ 280,000 | |
| Equipment (net) | $ 700,000 | |
| Liabilities | $ (410,000) | |
| Fair value of net identifiable assets | $ 850,000 | |
| Goodwill | $ 80,000 (2) | |
Table: (3)
Computation of liabilities:
Computation of Common Stock:
Computation of Additional paid-in capital:
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On June 30, 2023, Wisconsin, Incorporated, issued $392,500 in debt and 15,400 new shares of its $10 par value stock to Badger
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What are the consolidated balances for the following accounts?
Note: Input all amounts as positive values
a. Net income
b. Retained earnings, 1/1/23
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Wisconsin
$ (1,023,000)
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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 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, 1/1/17.c. Patented technology.d. Goodwill.e. Liabilities.f. Common stock.g. Additional paid-in capital.
On June 30, 2020, Wisconsin, Inc., issued $315,450 in debt and 18,100 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
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Revenues
$
(985,000
)
$
(462,000
)
Expenses
707,000
293,000
Net income
$
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$
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Retained earnings, 1/1
$
(801,000
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$
(236,000
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Net income
(278,000
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(169,000
)
Dividends declared
105,000
0
Retained earnings, 6/30
$
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)
$
(405,000
)
Cash
$
42,000
$
79,000
Receivables and inventory
413,000
216,000
Patented technology (net)
911,000
347,000
Equipment (net)
739,000
664,000
Total assets
$
2,105,000
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Chapter 2 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
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Ch. 2 - Prob. 11QCh. 2 - Which of the following does not represent a...Ch. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - An acquired entity has a long-term operating lease...Ch. 2 - When does gain recognition accompany a business...Ch. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10PCh. 2 - On June 1, Cline Co. paid 800,000 cash for all of...Ch. 2 - On May 1, Donovan Company reported the following...Ch. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - Prob. 15PCh. 2 - Prob. 16PCh. 2 - On its acquisition-date consolidated balance...Ch. 2 - On its acquisition-date consolidated balance...Ch. 2 - Problems 19 and 20 are based on the following...Ch. 2 - In the December 31, 2017, consolidated balance...Ch. 2 - Prob. 21PCh. 2 - The following book and fair values were available...Ch. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - SafeData Corporation has the following account...Ch. 2 - Prob. 33PCh. 2 - Prob. 34PCh. 2 - Prob. 35APACh. 2 - On February 1, Piscina Corporation completed a...Ch. 2 - Prob. 37APBCh. 2 - Prob. 38APBCh. 2 - Prob. 1DYSCh. 2 - Prob. 2DYSCh. 2 - Prob. 3DYSCh. 2 - Prob. 4DYS
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