Constructing the Consolidated Balance Sheet at Acquisition On January 1 of the current year, Liu Company purchased all of the common shares of Reed Company for $380,000 cash. Balance sheets of the two firms immediately after the acquisition follow During purchase negotiations, Reed's PPE were appraised at $332,000 and all of its remaining assets and liabilities were appraised at values approximating their book values. Liu also concluded that an additional $33,000 (for goodwill) demanded by Reed's shareholders was warranted because Reed's earning power was better than the industry average. Prepare the consolidating adjustments and the consolidated balance sheet at acquisition. Use negative signs with consolidating adjustment answers, when appropriate. Reed Consolidating Consolidated Company Company Adjustments Balance Sheet Current assets $950,000 $70,000 Investment in Reed 380,000 0 PPE, net 1,600,000 305,000 0 Goodwill $2,930,000 $375,000 Total assets Liabilities $450,000 $55,000 0 Contributed capital 1,850,000 280,000 0 630,000 40,000 Retained earnings $2,930,000 $375,000 0 Total liabilities & stockholders' equity