On December 31, 2017, Pumpkin Inc. issued 30,000 new shares of its $25 par value stock in exchange for all the outstanding shares of Squash Corp. Pumpkin's shares had a fair value on that date of $70 per share. Pumpkin paid $15,000 to an attorney assisting in the arrangements. Pumpkin also paid $12,500 in stock issuance costs to effect the acquisition of Squash. Squash will retain its incorporation.

The financial statements for Pumpkin Inc. and Squash Corp., just prior to their combination, for the year ending December 31, 2017, follow. Squash's buildings were undervalued on its financial records by $150,000 with a 10 year remaining life.

Required: Prepare journal entries and consolidate worksheet for December 31, 2017. (50 points)

	Pumpkin Inc.	Squash Corp.
Revenues	$(1,500,000)	$(550,000)
Expenses	$1,100,000	$250,000
Net Income	$(400,000)	$(300,000)
Retained Earnings 1/1/17	$(500,000)	$(200,000)
Net Income (from above)	$(400,000)	$(300,000)
Dividends paid	$180,000	$80,000
Retained Earnings 12/31/17	$(720,000)	$(420,000)
Current Assets
Cash	$200,000	$175,000
Receivables & Inventory	$240,000	$270,000
Buildings (net) (10 yr)	$660,000	$260,000
Equipment (net) (5 yr)	$600,000	$120,000
Total Assets	$1,700,000	$825,000
Liabilities	$(275,000)	$(195,000)
Common Stock	$(525,000)	$(110,000)
Additional Paid-In Capital	$(180,000)	$(100,000)
Retained Earnings 12/31/15	$(720,000)	$(420,000)
Total Liabilities and equity	$(1,700,000)	$(825,000)