Question

On June 30, 2020, Wisconsin, Inc., issued $181,400 in debt and 23,100 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				Badger
Revenues	$	(1,043,000	)		$	(453,000	)
Expenses		742,000				294,000
Net income	$	(301,000	)		$	(159,000	)
Retained earnings, 1/1	$	(825,000	)		$	(264,000	)
Net income		(301,000	)			(159,000	)
Dividends declared		94,500				0
Retained earnings, 6/30	$	(1,031,500	)		$	(423,000	)
Cash	$	101,500			$	88,000
Receivables and inventory		451,000				215,000
Patented technology (net)		931,000				374,000
Equipment (net)		705,000				661,000
Total assets	$	2,188,500			$	1,338,000
Liabilities	$	(527,000	)		$	(445,000	)
Common stock		(360,000	)			(200,000	)
Additional paid-in capital		(270,000	)			(270,000	)
Retained earnings		(1,031,500	)			(423,000	)
Total liabilities and equities	$	(2,188,500	)		$	(1,338,000	)

Wisconsin also paid $32,700 to a broker for arranging the transaction. In addition, Wisconsin paid $46,800 in stock issuance costs. Badger’s equipment was actually worth $833,500, but its patented technology was valued at only $344,100.

What are the consolidated balances for the following accounts?

	Accounts Amounts a. Net income b. Retained earnings, 1/1/20 c. Patented technology (net) d. Goodwill e. Liabilities f. Common stock g. Additional paid-in capital

Answer 1

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