P3-5 Prepare a consolidated balance sheet one year after acquisition On January 1, 2016, Mignonne Corporation paid $2,850,000 in cash for a 100 percent interest in Petite Corporation when Petite’s common stock was at $2,000,000 and retained earnings were at $500,000.

Equipment with a five-year remaining useful life was undervalued by $350,000.

Comparative balance sheet data for Mignonne and Petite Corporations at December 31, 2016, are as follows (in thousands):

Mignonne Petite Assets Cash $104 $70 Receivables–net 300 250 Inventories 900 850 Land 500 300 Equipment–net 1,500 1,200 Investment in Petite 2,786 —

$6,090 $2,670 Equities Accounts payable $500 $120 Common stock, $10 par 4,000 2,000 Retained earnings 1,590 550

$6,090 $2,670 REQuIRED: Prepare a consolidated balance sheet for Mignonne Corporation and Subsidiary at December 31, 2016.