On January 2. 20X8, B.N. Counter Corporation purchased 75 percent of the outstanding common stock of Ticken Tie Company. In exchange for Ticken Tie's stock. B.N. Counter issued bonds payable with a par and fair value of \(\$ 500,000\) directly to the selling stockholders of Ticken Tie. The two companies continued to operate as separate entities subsequent to the combination.

Immediately prior to the combination, the book values and fair values of the companies' assets and liabilities were as follows:

At the date of combination, Ticken Tie owed B.N. Counter \(\$ 6,000\) plus accrued interest of \(\$ 500\) on a short-term note. These amounts have been properly recorded by both companies.
\section*{Required}

a. Record the business combination on the books of B.N. Counter Corporation.

b. Present in general journal form all elimination entries that would be needed in a workpaper to prepare a consolidated balance sheet immediately following the business combination on January 2, 20X8.

c. Prepare and complete a consolidated balance sheet workpaper as of January 2, 20X8, immediately following the business combination.

d. Present a consolidated balance sheet for B.N. Counter and its subsidiary as of January 2, 20X8.

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B.N. Counter Ticken Tie Book Value Fair Value Book Fair Value Value Cash Receivables Allowance for Bad Debts Inventory $ 12.000 $ 12,000 $ 9,000 $ 9,000 41,000 39.000 31,000 30,000 (2.000) (1,000) 86,000 89.000 68,000 72,000 Land 55,000 200,000 50,000 70.000 Buildings and Equipment 960,000 650,000 670.000 500.000 Accumulated Depreciation (411,000) (220,000) Patent 40.000 Total Assets $741,000 $990,000 $607,000 $721,000 Current Payables Bonds Payable $ 38,000 200,000 $ 38,000 210,000 $ 29.000 $ 29.000 100.000 90.000 Common Stock 300.000 200.000 Additional Paid-In Capital 100,000 130,000 Retained Earnings 103,000 148,000 Total Liabilities and Equity $741,000 $607,000