Exercise 1 (10 marks) Pamula Corporation paid $279,000 for 90% of Shad Corporation's $10 par common stock on December 31, 2014, when Shad Corporation's stockholders' equity was made up of $200,000 of Common Stock, $60,000 Additional Paid-in Capital and $40,000 of Retained Earnings. Shad's identifiable assets and liabilities reflected their fair values on December 31, 2014, except for Shad's inventory which was undervalued by $5,000 and their land which was undervalued by $2,000. Balance sheets for Pamula and Shad immediately after the business combination are presented in the partially completed working papers. Required: Prepare a consolidated balance sheet for Pamula Corporation and subsidiary immediately after the business combination. Show the adjusting and eliminating entries. Show all the calculations Eliminations Consol dated Balance Pamula Shad Debit Credit Sheet ASSETS Kash S 26,000 $20,000 Accounts receivable-net 20,000 30,000 Inventories 125,000 110,000 Land 30,000 80,000 Plant assets-net 320,000 160,000 Investment in Shad 279,000 Total Assets St 800,000 $400,000 EQUITIES Current liabilities S 110,000 $100,000 Capital stock 400,000 200,000 Additional paid- in capital 100,000 60,000 Retained Earnings 190,000 40,000 TOTAL EQUITIES 800,000 $400,000