On December 31, 2020, Post company issued 20,000 shares of its $18 par common stock (current fair value $30 a share) to stockholders of Sage company for 18,000 shares of the outstanding $10 par common stock of Sage. Out of pocket costs of the business combination paid by Post on December 31, 2020, associated with SEC Registration $20,000.

A balance sheet of Post Corporation and Sage Company for the year ended December 31, 2020, prior to consummation of the business combination, follows:

Separate Financial Statements ( prior to business combination)
For Year Ended December 31, 2020
	Post Corp.	Sage Comp
Balance Sheets
Assets
Cash	125,000	40,000
Inventories	150,000	110,000
Other Current Assets	110,000	70,000
Plant Assets (Net)	450,000	300,000
Patent (Net)		20,000
Total Assets	835,000	540,000
Liabilities and Stockholders' Equity
Income Taxes Payable	26,000	35,000
Other Liabilities	325,000	115,000
Common Stock	300,000
Common Stock, $10 par		200,000
Additional Paid-In Capital	50,000	58,000
Retained Earnings	134,000	132,000
Total Liabilities & Stockholders' Equity	835,000	540,000

On December 31, 2020, the current fair values of Sage companys identifiable assets and liabilities were the same as their carrying amounts, except for the Inventories, Plant Assets (net), and Patent (net). They were as $90,000, $365,000, $30,000, respectively.

Instructions:

1. Prepare journal entries for Post Corporation on December 31, 2020, to record the business combination with Sage Company. (6 marks).

2. Prepare a working paper for consolidated balance sheet and related working paper elimination (in journal entry format) for Post Corporation and subsidiary on December 31, 2020.