AP13-8A (Acquisition of a 100%-owned subsidiary) On July 31, Porter Ltd. purchased Rachel Excavation Inc. for $1.9 million cash. Immediately before the acquisition on July 31, the statements of financial position for the two companies were as follows: Porter Rachel Assets Cash Accounts receivable $ 2,960,000 1,500,000 $ 100,000 400,000 Inventory 3,000,000 1,000,000 Capital assets 4,000,000 1,600,000 Total assets $11,460,000 $3,100,000 Liabilities and Shareholders' Equity Accounts payable $ 2,500,000 Long-term liabilities Common shares 2,300,000 5,400,000 $ 400,000 1,300,000 Retained earnings Total liabilities and shareholders' equity 900,000 1,260,000 500,000 $11,460,000 $3,100,000 On July 31, the market values of Rachel's inventories and equipment were $1.3 million and $1.7 million, respectively. The carrying amount of Rachel's liabilities was equal to their fair market values. Required: a. Prepare the journal entry recorded by Porter to recognize the acquisition. b. Prepare a consolidated work sheet and a consolidated statement of financial position at July 31.