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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 12mm mam
Net income m i
Q 5 000
Retained earnings, Januai}r 1, 2018 $480,000 $252,000
Net income (from above) 120,000 96,000
Dividends declared m —§1—
Retained earnings, December 31, 2018 m m
2 2
Current assets $360,000 $120,000
Laud 120,000 108,000
Building (net) m m
Total assets mm M
2 Q
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,r M 554.09
'0 0 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

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