On January 1, 2018, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company To acquire these shares, Marshall issued $351,000 in long-term liabilities and 20,000 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Marshall paid $25,500 to accountants, lawyers, and brokers for assistance in the acquisition and another $10,500 in connection with stock issuance costs Prior to these transactions, the balance sheets for the two companies were as follows: Company Book Value Company Book Val Cash Receivables Inventory Land Buildings (net) Equipment (net) Accounts payable Long-term labilities Common stock-$1 par value Common stock-$20 par value Additional paid-in capital Retained earnings, 1/1/18 75,0039,800 361,000 446,880 212,000 467,800 184,000 (175,000) (60,600) (495,000) (351,000) (110,000) 171,680 235,000 283,000 315,000 51,300 (120,000) (360,000 (605,000) (483,500) Note: Parentheses indicate a credit balance In Marshall's appraisal of Tucker, it deemed three accounts to be undervalued on the subsidiary's books: Inventory by $6,000, Land by $14,800, and Buildings by $22,000. Marshall plans to maintain Tucker's separate legal identity and to operate Tucker as a wholly owned subsidiary 1 of 1 Nex a. Determine the amounts that Marshall Company would report in its postacquisition balance sheet. In preparing the postacquisition balance sheet, any required adjustments to income accounts from the acquisition should be closed to Marshall's retained earnings Other accounts will also need to be added or adjusted to reflect the journal entries Marshall prepared in recording the acquisition b. To verify the answers found in part (a), prepare a worksheet to consolidate the balance sheets of these two companies as of January 1, 2018 Complete this question by entering your answers in the tabs below. Required A RequiredB Determine the amounts that Marshall Company would report in its postacquisition balance sheet. In preparing the postacquisition balance sheet, any required adjustments to income accounts from the acquisition should be closed to Marshall's retained earnings. Other accounts will also need to be added or adjusted to reflect the journal entries Marshall prepared in recording the acquisition Totals Cash Inventory Land Buildings (net) Required A Required B Determine the amounts that Marshall Company would report in its postacquisition balance sheet. In preparing the postacquisition balance sheet, any required adjustments to income accounts from the acquisition should be closed to Marshall's retained earnings. Other accounts will also need to be added or adjusted to reflect the journal entries Marshall prepared in recording the acquisition. Con Totals Cash Receivables Inventory Land Buildings (net) Equipment (net) Total assets Accounts payable Long-term liabilities Common stock Additional paid-in capital Retained earnings Total liabilities and equities MARSHALL COMPANY AND CONSOLIDATED SUBSIDIARY Worksheet January 1, 2018 MarshallTucker Consolidation Entries Consolidated Company Company Debit Accounts Totals Credit Cash Receivables Inventory Land Buildings (net) Equipment (net) Investment in Tucker Total assets Accounts payable Long-term liabilities Common stock Additional paid-in capital Retained earnings, 1/1/18 Total liabilities and owners' equities Prey 1 of 1 e
