Marmee Company and Small Enterprises agree to merge at a time when the balance sheets of the two companies are as shown below.

Marmee issues 50,000 shares with market value of \(\$ 800,000\) to the owners of Small in return for their 64,000 shares, which represent equity of \(\$ 212,000(=\$ 312,000\) of assets - \(\$ 100,000\) of liabilities). The excess of Marmee's cost \((\$ 800,000)\) over the book value of Small's assets acquired ( \(\$ 212,000\) ) results from Small's book value of assets being \(\$ 448,000\) less than their current value and from \(\$ 140,000\) of goodwill ( \(\$ 800,000\) - \(\$ 212,000\) \(=\$ 448,000+\$ 140,000\) ).
Prepare consolidated balance sheets as of the merger date, assuming that the merger is treated as a a Purchase.
b Pooling of interests.

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Marmee Small Company Enterprises Assets Liabilities Common Stock ($1 par) $700,000 $312,000 $150,000 $100,000 160,000 64,000 Additional Paid-in Capital 120,000 34,000 Retained Earnings 270,000 114,000 Total Equities $700,000 $312,000