Lucky's Company acquires Waterview, Inc., by issuing 40,000 shares of $1 par common stock with a market price of $25 per share on the acquisition date and paying $125,000 cash. The assets and liabilities on Waterview's balance sheet were valued at fair values except equipment that was undervalued by $300,000. There was also an unrecorded patent valued at $40,000, as well as an unrecorded trademark valued at $75,000. In addition, the agreement provided for additional consideration, valued at $60,000, if certain earnings targets were met. The pre-acquisition balance sheets for the two companies at acquisition date are presented below.

Compute consolidated liabilities.

Cash Accounts receivable Inventory Property, plant, and equipment Lucky's Company $300,000 250,000 254,000 2.300.000 $3,104,000 Waterview, Inc. $260,000 135,000 275,000 356,500 $1,026,500 Accounts payable Salaries and taxes payable Notes payable Common stock Additional paid-in capital Retained earnings $45,000 450,000 500,000 250,000 950,000 909,000 $3,104,000 $37,500 46,000 450,000 60,000 106,500 326,500 $1,026,500