Balance sheets for Prego Company and Sprague Company as of December 31, 2018, follow:

The fair values of Sprague Company?s assets and liabilities are equal to their book values.

Required:

Prepare a consolidated balance sheet as of January 1, 2019, under each of the following assumptions:

A. On January 1, 2019, Prego Company purchased 90% of the outstanding common stock of Sprague Company for $594,000.

B. On January 1, 2019, Prego Company exchanged 11,880 of its $20 par value common shares with a fair value of $50 per share for 90% of the outstanding common shares of Sprague Company. The transaction is a purchase.

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Prego Company Sprague Company $ 700,000 Cash $111,000 Accounts receivable (net) 892,000 230,000 Inventory Property and equipment (net) Land 544,000 $1,927,000 120,000 60,000 $468,000 94,000 $963,000 Total assets $4,183,000 $ 302,000 Accounts payable Notes payable Long-term debt Common stock Other contributed capital Retained earnings $152,000 588,000 350,000 61,000 90,000 1,800,000 543,000 500,000 80,000 600,000 80,000 Total equities $4,183,000 $963,000