Question

On January 2, 2016, Revolution Co. issued 150,000 new shares of its $1 par value common stock valued at $16 a share for all of Founders, Inc.’s outstanding common shares. The fair value and book value of Founders’ identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2016, is as follows:

	Revolution	Founders
Cash	$ 250,000	$ 180,000
Inventories	320,000	600,000
Other Current Assets	600,000	400,000
Land	350,000	500,000
Property, Plant & Equipment	5,100,000	2,000 000
Total Assets	$6,620,000	$3,680,000

Accounts Payable	$ 800,000	$ 350,000
Notes Payable	1,800,000	1,150,000
Common Stock, $1 par	2,000,000	1,000,000
Additional Paid-in Capital	1,000,000	350,000
Retained Earnings	1,020,000	830,000
Total Liabilities & Equities	$6,620,000	$3,680,000

Required:  Prepare a consolidated balance sheet for Revolution Co. immediately after the business combination.

D.  Parent Company acquires a subsidiary by issuing 120,000 common shares with a market value of $30 per share for all of the subsidiary's common stock. The subsidiary's assets and liabilities were recorded at fair values with the exception of equipment undervalued by $600,000. In addition, there were two unrecorded assets: a trademark valued at $350,000 and a customer list valued by the subsidiary at $200,000. The balance sheets of the parent and subsidiary immediately after the acquisition are presented below.  

	Parent	Subsidiary
Cash	$ 640,200	$ 423,100
Accounts Receivable	885,500	646,000
Inventory	960,000	765,700
Equity Investment	3,600,000
PP&E net	1,230,300	1,080,200
Total Assets	$ 7,316,000	$ 2,915,000

Accounts Payable	$ 105,000	$ 132,000
Salaries Payable	200,400	232,200
Long-Term Notes Payable	600,000	400,800
Common Stock	240,000	210,000
Additional Paid-in Capital	5,120,000	300,000
Retained Earnings	1,050,600	1,640,000
Total Liabilities & Equity	$ 7,316,000	$ 2,915,000

Required:  At what amounts will each of the following appear on the consolidated balance sheet?

1. Inventory

2. Equity Investment  

3. Property, Plant, and Equipment (net of accumulated depreciation)

4. Goodwill

5. Common Stock

6. Additional Paid-in Capital

7. Retained Earnings

8. Total Intangible Assets

Answer 1