The financial statements for CAP Inc. and SAP Company for the year ended December 31, Year 5, follow:

 

CAP

SAP

Revenues

$ 900,000

$ 300,000

Expenses

660,000

200,000

Profit

$ 240,000

$ 100,000

 

CAP

SAP

Retained earnings, 1/1/Year 5

$ 800,000

$ 200,000

Profit

240,000

100,000

Dividends paid

90,000

0

Retained earnings, 12/31/Year 5

$ 950,000

$ 300,000

Equipment (net)

$ 700,000

$ 600,000

Patented technology (net)

900,000

300,000

Receivables and inventory

400,000

170,000

Cash

80,000

110,000

Total assets

$2,080,000

$1,180,000

Ordinary shares

$ 530,000

$ 470,000

Retained earnings

950,000

300,000

Liabilities

600,000

410,000

Total equities and liabilities

$2,080,000

$1,180,000

On December 31, Year 5, after the above figures were prepared, CAP issued $300,000 in debt and 15,000 new shares to the owners of SAP to purchase all of the outstanding shares of that company. CAP shares had a fair value of $40 per share. CAP also paid $30,000 to a broker for arranging the transaction. In addition, CAP paid $40,000 in stock issuance costs. SAP’s equipment was actually worth $710,000 but its patented technology was valued at only $270,000.

Required:

What are the balances for following accounts on the on the Year 5 consolidated financial statements?

(a) Profit

(b) Retained earnings, 12/31/Year 5

(c) Equipment

(d) Patented technology

(e) Goodwill

(f) Ordinary shares

(g) Liabilities

    • 8 years ago
    CAP Inc. and SAP Company A+ Tutorial
    NOT RATED

    Purchase the answer to view it

    blurred-text
    • attachment
      cap_inc._and_sap_company.docx