REFERENCE: Ref.02_01
Bullen Inc.assumed 100% control over Vicker Inc.on January 1,20X1.The book value and fair value of Vicker's accounts on that date (prior to creating the combination)follow,along with the book value of Bullen's accounts:

-Assume that Bullen issued 12,000 shares of common stock with a $5 par value and a $42 fair value for all of the outstanding shares of Vicker.What will be the consolidated Additional Paid-In Capital and Retained Earnings (January 1,20X1 balances)as a result of this transaction (which is not a pooling of interests)?

Question

REFERENCE: Ref.02_01
Bullen Inc.assumed 100% control over Vicker Inc.on January 1,20X1.The book value and fair value of Vicker's accounts on that date (prior to creating the combination)follow,along with the book value of Bullen's accounts:
 
-Assume that Bullen issued 12,000 shares of common stock with a $5 par value and a $42 fair value for all of the outstanding shares of Vicker.What will be the consolidated Additional Paid-In Capital and Retained Earnings (January 1,20X1 balances)as a result of this transaction (which is not a pooling of interests)?

Quizplus · Accepted Answer

To calculate the consolidated additional paid-in capital, we need to find the excess of the fair value of consideration transferred over the par value of stock issued. In this case, Bullen issued 12,000 shares of common stock with a $5 par value and a $42 fair value for all the outstanding shares of Vicker.

Total consideration transferred = 12,000 * $42 = $504,000
Par value of stock issued = 12,000 * $5 = $60,000

Excess of fair value over the par value = $504,000 - $60,000 = $444,000

Therefore, the consolidated additional paid-in capital is $444,000.

To calculate the consolidated retained earnings, we need to add the individual retained earnings of Bullen and Vicker.

Consolidated retained earnings = Bullen's retained earnings + Vicker's retained earnings
= $100,000 + $320,000 = $420,000

Therefore, the consolidated retained earnings are $420,000.

Hence, the correct answer is D) $464,000 and $160,000.

REFERENCE: Ref.02_01 Bullen Inc.assumed 100% Control Over Vicker Inc.on January 1,20X1.The Book