Prior to being united in a business combination, Atkins, Inc., and Waterson Corporation had the following stockholders’ equity figures:
|
Atkins |
Waterson |
|
|
Common stock ($1 par value) |
$180,000 |
$45,000 |
|
Additional paid in capital |
90,000 |
20,000 |
|
Retained earnings |
300,000 |
110,000 |
Atkins issues 51,000 new shares of its common stock valued at $3 per share for all of the outstanding stock of Waterson. Assume that Atkins acquires Waterson. Immediately afterward, what are consolidated Additional Paid In Capital and Retained Earnings, respectively?
a. $104,000 and $300,000.
b. $110,000 and $410,000.
c. $192,000 and $300,000.
d. $212,000 and $410,000.
Hill, Inc., obtains control over Loring, Inc., on July 1. The book value and fair value of Loring’s accounts on that date (prior to creating the combination) follow, along with the book value of Hill’s accounts:
|
Hill |
Loring |
Loring |
|
|
Revenues |
$250,000 |
$130,000 |
|
|
Expenses |
170,000 |
80,000 |
|
|
Retained earnings, 1/1 |
130,000 |
150,000 |
|
|
Cash and receivables |
140,000 |
60,000 |
$60,000 |
|
Inventory |
190,000 |
145,000 |
175,000 |
|
Patented technology (net) |
230,000 |
180,000 |
200,000 |
|
Land |
400,000 |
200,000 |
225,000 |
|
Buildings and equipment (net) |
100,000 |
75,000 |
75,000 |
|
Liabilities |
540,000 |
360,000 |
350,000 |
|
Common stock |
300,000 |
70,000 |
|
|
Additional paid in capital |
10,000 |
30,000 |