Question

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) $ 225,000 $ 36,000 Additional paid-in capital 112,500 15,500 Retained earnings 315,000 148,200 Atkins issues 60,750 new shares of its common stock valued at $3 per share for all of the outstanding stock of Waterson. Immediately afterward, what are consolidated Additional Paid-In Capital and Retained Earnings, respectively?

Answer 1

Answer:

Additional paid in capital $294,750

Retained earning = $315,000

Explanation:

Given data:

Additional paid in capital

for Atkins = 112,500

for waterson = 15,500

Retained Earning

For Atkins  = 315,000

For waterson = 148,200

News shares issued 60,750

Price per share $3

Additional paid in capital will be

$= 112,500 + ( 60,750 \times 3)$

= 294,750

Retained earning = 315,000