Cord Company acquired \(100 \%\) of the outstanding voting common stock of Thorpe Company on January 2, 1999, for \(\$ 2,700,000\). At the end of business on the date of acquisition, the balance sheets for the two companies were as follows:

The excess of cost over book value is attributable to the above-average earnings prospects of Thorpe Company. On the date of acquisition, Thorpe Company borrowed \(\$ 72,000\) from Cord Company by giving a note.

a. Prepare a work sheet for a consolidated balance sheet as of the date of acquisition.

b. Prepare a consolidated balance sheet for January 2, 1999.

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Assets Cord Company Thorpe Company Notes receivable Cash Accounts receivable, net Merchandise inventory.. $ 315,000 $ 180,000 234,000 144,000 360,000 90,000 495,000 234,000 Investment in Thorpe Company 2,700,000 Equipment, net 648,000 450,000 Buildings, net 1,890,000 990,000 Land 765,000 405,000 Total assets $7,407,000 $2,493,000 Liabilities and Stockholders' Equity Accounts payable Notes payable Common stock-$45 par value Retained earnings.. Total liabilities and stockholders' equity $ 117,000 $ 135,000 90,000 5,400,000 1,800,000 108,000 1,800,000 450,000 $7,407,000 $2,493,000