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12. The following are preliminary financial statements for Green Co. and Gold Co. for the year ending
December 31, 2018 prior to Green's acquisition of Gold.
Green Co.
Gold Co.
Sales
$360,000
$228,000
Expenses
(240,000)
(132,000)
Net income
$120,00
$
96,000
Retained earnings, January 1, 2018
$480,000
$252,000
Net income (from above)
120,000
96,000
Dividends declared
(36,000)
-0-
Retained earnings, December 31, 2018
$564,00
$348,00
0
0
Current assets
$360,000
$120,000
Land
120,000
108,000
Building (net)
480,000
336,000
Total assets
$960,00
$564,00
O
Liabilities
$108,000
$132,000
Common stock
192,000
72,000
Additional paid-in capital
96,000
12,000
Retained earnings, December 31, 2018
564,000
348,000
Total liabilities and stockholders' equity
$960,00
564,00
On December 31, 2018 (subsequent to the preceding statements), Green exchanged 10,000 shares of its
$10 par value common stock for all of the outstanding shares of Gold. Green's stock on that date has a fair
value of $60 per share. Green was willing to issue 10,000 shares of stock because Gold's land was
appraised at $204,000. Green also paid $14,000 to attorneys and accountants who assisted in creating this
combination.
Required:
Assuming that these two companies retained their separate legal identities, prepare the consolidation

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