Jaynes Inc The Following Figures Came from the Individual Accounting Records of January

question 82

Essay

Jaynes Inc. acquired all of Aaron Co.'s common stock on January 1, 2012, by issuing 11,000 shares of $1 par value common stock. Jaynes' shares had a $17 per share fair value. On that date, Aaron reported a net book value of $120,000. However, its equipment (with a five-year remaining life) was undervalued by $6,000 in the company's accounting records. Any excess of consideration transferred over fair value of assets and liabilities is assigned to an unrecorded patent to be amortized over ten years. The following figures came from the individual accounting records of these two companies as of December 31,2012:
$\begin{array}{lrrr}&\text { Jaynes Inc. }&\text { Aaron Co. } \\\text { Revenues } & {720,000} & \$ 276,000 \\\text { Expenses } & 528,000 & 144,000 \\\text { Investment income } & \text { Not given } & - \\\text { Dividends paid } & 100,000 & 60,000\end{array}$
The following figures came from the individual accounting records of these two companies as of December 31,2013:
$\begin{array}{lcc}&\text { Jaynes Inc. }&\text { Aaron Co. } \\\hline \text { Revenues } & 840,000 & 336,000 \\ \text { Expenses } & 552,000 & 180,000 \\ \text { Investment income } & \text { Not given } & \text { - } \\ \text { Dividends paid } & 110,000 & 50,000 \\ \text { Equipment } & 600,000 & 360,000 \\\text { Retained earnings, } 12 / 31 / 13 \text { balance } & 960,000 & 216,000 \\\end{array}$ What was the total for consolidated patents as of December 31, 2013?

---

Definitions:

Equilibrium Price

The price at which the quantity of a good or service supplied equals the quantity demanded, leading to market stability where there is no tendency for change.

Excess Supply

A situation where the quantity of a good or service supplied exceeds the quantity demanded at the current price.

Nonprice Rationing

The allocation of goods among consumers using criteria other than price, such as waiting times or quotas.

Excess Supply

A situation where the quantity supplied of a good or service exceeds the quantity demanded at the current price.