Lucy Cat Incorporated acquires Walter Corporation, by issuing $80,000$ shares of $$1$ par common stock with a market price of $$25$ per share on the acquisition date and paying $$250,000$ cash. The assets and liabilities on Walter's balance sheet were valued at fair values except equipment that was undervalued by $$600,000.$ There was also an unrecorded patent valued at $$80,000,$ as well as an unrecorded trademark valued at $$150,000.$ In addition, the agreement provided for additional consideration, valued at $$120,000,$ if certain earnings targets were met.

The pre$-$acquisition balance sheets for the two companies at acquisition date are presented below.

Hint: Lucy Cat's balance sheet reports amounts immediately before recording the acquisition.

Lucy Cat's Walter Corp. Cash $$600,000$ $$520,000$ Accounts receivable $500,000270,000$ Inventory $508,000550,000$ Property, plant, and equipment $4,600,000713,000$ $$6,208,000$ $$2,053,000$ Accounts payable $$90,000$ $$75,000$ Salaries and taxes payable $900,00092,000$ Notes payable $1,000,000900,000$ Common stock $500,000120,000$ Additional paid$-$in capital $1,900,000213,000$ Retained earnings $1,818,000653,000$ $$6,208,000$ $$2,053,000$

Compute consolidated liabilities.

Select one:

a$.$ $$3,117,000$

b$.$ $$2,110,000$

c$.$ $$3,057,000$

d$.$ $$1,110,000$