On January 1, 2014, Chesapeake Corporation issued common stock with a fair value of $810,000 in exchange for 90% of Deardon Corporation€™s common stock. Following are the January 1, 2014, separate balance sheets of Chesapeake and Deardon immediately following the acquisition, plus fair value information for Deardon€™s assets and liabilities:

Required:
1. Provide the adjustments and elimination entries needed to prepare the post-acquisition January 1, 2014, consolidated balance sheet under the acquisition method.
2. Prepare the January 1, 2014, consolidated balancesheet.

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Deardon Chesapeake Book Value Fair Value Assets Current assets PP&E, net Patent Investment in Deardon S 500,000 800,000 100,000 810,000 S2.210,000 400,000 800,000 S 450,000 775,000 75,000 Total assets $1,200,000 S1,300,000 Liabilities 150,000 270,000 420,000 S 150,000 300,000 S 450,000 Current liabilities S 400,000 500,000 900,000 Long-term liabilities Total liabilities Stockholders' Equity Common stock 900,000 410,000 1,310,000 $2,210,000 400,000 380,000 780,000 $1,200,000 Retained earnings Total stockholders' equity Total liabilities and equity