A. Liu Company acquires Heller, Inc., by issuing 30,000 shares of $1 par common stock with...

A. Liu Company acquires Heller, Inc., by issuing 30,000 shares of $1 par common stock with a market price of $22 per share on the acquisition date and paying $150,000 cash. The assets and liabilities on Heller’s balance sheet were valued at fair values except equipment that was undervalued by $225,000. There was also an unrecorded patent valued at $45,000, as well as an unrecorded trademark valued at $60,000. In addition, the agreement provided for additional consideration, valued at $50,000, if certain earnings targets were met.

The pre-acquisition balance sheets for the two companies at acquisition date are presented below.

Assets	Liu Company	Heller Inc.
Cash	$ 220,600.00	$ 25,400.00
Accounts Receivable	$ 125,000.00	$ 132,000.00
Inventory	$ 106,000.00	$ 201,000.00
Property, plant, & equipment	$ 2,003,500.00	$ 406,500.00
Total Assets	$ 2,455,100.00	$ 764,900.00
Accounts Payable	$ 40,500	$ 32,700
Salaries & Taxes Payable	$ 37,600.00	$ 45,900.00
Notes Payable	$ 510,100.00	$ 220,000.00
Common Stock	$ 230,000.00	$ 60,000.00
Additional paid-in Capital	$ 950,000.00	$ 106,500.00
Retained Earnings	$ 686,900.00	$ 299,800.00
Total Liabilities & Equity	$ 2,455,100.00	$ 764,900

1. At what amount is the investment recorded on Richland's books?

2. Compute the consolidated balance in Cash.

3. Compute consolidated common stock.

4. Compute consolidated additional paid-in capital.

5. What amount of goodwill was recorded in the acquisition?

6. Compute consolidated liabilities.

7. Compute consolidated property, plant & equipment.

8. Compute consolidated inventory.

9. Compute consolidated identifiable intangible assets.

10. What is consolidated retained earnings?

Expert Solution

ekkarill92 answered 2 years ago

EverBlue Company issued 30,000 shares of common stock in 2018. The par value of the common...

EverBlue Company issued 30,000 shares of common stock in 2018. The par value of the common stock is $1 per share. The selling price is $20 per share. Which of the following is true? Group of answer choices Stockholders’ equity increases by $600,000. Stockholders’ equity increases by $30,000. Stockholders’ equity decreases by $30,000. Stockholders’ equity decreases by $600,000.

Casio Company has 30,000 shares of $1 par common stock issued and outstanding. The company also...

Casio Company has 30,000 shares of $1 par common stock issued and outstanding. The company also has 5,000 shares of $100 par 5% cumulative preferred stock outstanding. The company did not pay the preferred dividends in 2017, 2018 and 2019. On December 1, 2020, the company’s board of directors declared that $200,000 will be paid as dividend on January 17, 2021. What amount of dividends would common stockholders earn? * a) $200,000 b) $150,000 c) $125,000 d) $100,000

1.Casio Company has 30,000 shares of $1 par common stock issued and outstanding. The company also...

1.Casio Company has 30,000 shares of $1 par common stock issued and outstanding. The company also has 5,000 shares of $100 par 5% cumulative preferred stock outstanding. The company did not pay the preferred dividends in 2017, 2018 and 2019. On December 1, 2020, the company’s board of directors declared that $200,000 will be paid as dividend on January 17, 2021. What amount of dividends must the company pay the preferred shareholders? * a)$100,000 b)$75,000 c)$50,000 d)$25,000 2.Casio Company has...

Jones Company obtains all of the common stock of Hudson, Inc., by issuing 50,000 shares of...

Jones Company obtains all of the common stock of Hudson, Inc., by issuing 50,000 shares of its own stock. Under these circumstances, why might the determination of a fair value for the consideration be difficult?

On 1/1/2015 ABC received $300,000 in cash for issuing 10,000 shares of $9.000 par common stock....

On 1/1/2015 ABC received $300,000 in cash for issuing 10,000 shares of $9.000 par common stock. ABC received $600,000 cash for issuing 2000 shares of 200/par preferred stock. ABC purchased 15% of CDC stock for $25,000 cash. ABC is not intending to sell it anytime in the future and definatelly not in 2016. The value of the stock at the 12/31/20015 was $24,000. CDE paid ABC $1000 in dividends. ABC purchased (cash) DEF debt for $10,800. (10,000 face, 10%, 5year)...

2017 Jan. 2 Purchased 30,000 shares of O’Neal Company $3 par value common stock for $205,000...

2017 Jan. 2 Purchased 30,000 shares of O’Neal Company $3 par value common stock for $205,000 plus a broker’s fee of $3,580. O’Neal has 90,000 common shares outstanding and it policies will be significantly influenced by Frederick Company. Sept 1. O’Neal declared and paid a cash dividend of $3.20 per share. Dec. 31 O’Neal announced that net income for the year is $650,900. 2018 June 1 O’Neal declared and paid a cash dividend of $3.53 per share. Dec. 31 O’Neal...

Issuing stock. Remember that the account “Common Stock” represents the “par” value of the common stock...

Issuing stock. Remember that the account “Common Stock” represents the “par” value of the common stock issued over the life of the company. The Common stock or Preferred stock account is increased (credited) by the product of the number of shares times the par value of those shares. If the stock is issued at par, this will equal the amount of cash received. Note—Par value equals issue price. When stock is issued at an amount higher than par, the “extra”...

A company with 50,000 authorized shares of $1 par common stock issued 10,000 shares at $10...

A company with 50,000 authorized shares of $1 par common stock issued 10,000 shares at $10 per share, Subsequently, the company declared and paid a $3 cash dividend per share. On the date the company declared the dividend, the market price of the shares was $30 per share. What is the effect of the dividend on Retained Earnings? Retained earnings decreased Retained earnings increased Retained earnings remained the same None of the above. Refer to the previous question. By what...

Bacon Corporation began business by issuing 180,000 shares of $5 par value common stock for $25...

Bacon Corporation began business by issuing 180,000 shares of $5 par value common stock for $25 per share. During its first year, the corporation sustained a net loss of $30,000. The year-end balance sheet would show Common stock of $900,000. Common stock of $4,500,000. Total paid-in capital of $4,470,000. Total paid-in capital of $930,000.

Starting a Company (1) Issues 50,000 shares of $10 par value common stock at par value...

Starting a Company (1) Issues 50,000 shares of $10 par value common stock at par value for cash. (2) Acquires land and building costing $225,000 with the payment of $50,000 cash and the assumption of a 20-year, 8-percent mortgage for the balance. (3) Purchases a used crane for $13,200 cash (4) Acquires raw materials costing $8,600 on account. (5) Returns defective raw materials purchased in (4) and costing $900 to the supplier. The account has not yet been paid. (6)...

Question