Prepare:
(a) Balance sheet of the consolidated company as at March 31, 1918.
(b) Profit and loss account arranged to show the profits of the consolidated company for the three months ended March 31.
(c) Profit and loss account of the Keystone Tool Co., for the three months ended December 31.
(d) Statement showing the disposition of profits taken over by the new company.
(e) State what basis you make use of in determining the approximate value of merchandise on hand at December 31.
Miscellaneous
35. A manufacturer is desirous of selling his business, and furnishes a statement showing the condition of affairs for the past five years as follows:
| Amount of Sales | averaging | per | year | $800,000.00 | |
| Wages Paid | ” | ” | ” | 200,000.00 | |
| Expenses Paid | ” | ” | ” | 80,000.00 | |
| Raw Material | Purchased | ” | ” | 350,000.00 | |
| Supplies on Hand at present time | 40,000.00 | ||||
| Machinery in use at commencement of the five years | 150,000.00 | ||||
| (50% of the above amount has been in use for 10 | |||||
| years previous, and all additions made at cost | |||||
| prices, and nothing marked off for depreciation.) | |||||
| Carried at present at | $225,000.00 | ||||
| (All repairs have been charged to expense.) | |||||
| Real Estate valued at | 200,000.00 | ||||
What report would you make as to a fair valuation of this business? Explain fully your reasons for same.