On January 5, 2015, Alpha Inc. acquired 80% of the outstanding voting shares of Beta Inc. for $2,000,000 cash. Following are the separate balance sheets for the two companies immediately after the stock purchase, as well as fair value information regarding Beta Inc.:

Required:
1. Prepare the entries for adjustments and eliminations required to prepare the consolidated balance sheet immediately after acquisition under the acquisition method.
2. Prepare the consolidated balance sheet immediately afteracquisition.

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Beta Alpha Book Value Fair Value $1,750,000 5,000,000 2,000,000 $8,750,000 500,000 500,000 Current assets Fixed assets, net Investment in Beta 1,625,000 $2,125,000 125,000 2,000,000 $2,500,000 125,000 Total Assets Liabilities Current Liabilities 250,000 Stockholders' Equity Common stock Capital in excess of par Retained earnings Total Stockholders' Equity 7,000,000 500,000 1,000,000 8,500,000 1,500,000 500,000 2,000,000 Total Liabilities and Stockholders' Equity $8,750,000 $2,125,000