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On January 1, 2021, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall issued $200,000 in

On January 1, 2021, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall issued $200,000 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 $30,000 to accountants, lawyers, and brokers for assistance in the acquisition and another $12,000 in connection with stock issuance costs.

Prior to these transactions, the balance sheets for the two companies were as follows:

Marshall Company Book Value Tucker Company Book Value
Cash $ 60,000 $ 20,000
Receivables 270,000 90,000
Inventory 360,000 140,000
Land 200,000 180,000
Buildings (net) 420,000 220,000
Equipment (net) 160,000 50,000
Accounts payable (150,000 ) (40,000 )
Long-term liabilities (430,000 ) (200,000 )
Common stock$1 par value (110,000 )
Common stock$20 par value (120,000 )
Additional paid-in capital (360,000 ) 0
Retained earnings, 1/1/21 (420,000 ) (340,000 )

Note: Parentheses indicate a credit balance.

In Marshalls appraisal of Tucker, it deemed three accounts to be undervalued on the subsidiarys books: Inventory by $5,000, Land by $20,000, and Buildings by $30,000. Marshall plans to maintain Tuckers separate legal identity and to operate Tucker as a wholly owned subsidiary.

  1. Determine the amounts that Marshall Company would report in its postacquisition consolidated balance sheet. In preparing the postacquisition balance sheet, any required adjustments to income accounts from the acquisition should be closed to Marshalls retained earnings. Other accounts will also need to be added or adjusted to reflect the journal entries Marshall prepared in recording the acquisition.
  2. To verify the answers found in part (a), prepare a worksheet to consolidate the balance sheets of these two companies as of January 1, 2021.image text in transcribed image text in transcribed I only need help calculating the Additional Paid-In capital here, Thanks
Required A Required B Determine the amounts that Marshall Company would report in its postacquisition consolidated 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. (Input all amounts as positive values.) Show less 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 Consolidated Totals 38,000 360,000 505,000 400,000 670,000 210,000 $ 2,183,000 $ 190,000 830,000 130,000 520,000 505,000 $ 2,175,000 OOOO 001 Accounts Consolidated Totals MARSHALL LUMANT ANU LUNDULIUATEU SUDSILIART Worksheet January 1, 2021 Marshall Tucker Consolidation Entries Company Company Debit Credit 18,000 20,000 270,000 90,000 360,000 140,000 5,000 200,000 180,000 20,000 420,000 220,000 30,000 160,000 50,000 515,000 515,000 1,943,000 700,000 55,000 150,000 40,000 630,000 200,000 130,000 120,000 120,000 548,000 505,000 340,000 340,000 1,963,000 700,000 515,000 515,000 OOOOO 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, 1/1/21 Total liabilities and equities OOOOOO 38,000 360,000 505,000 400,000 670,000 210,000 0 2,183,000 190,000 830,000 130,000 548,000 505,000 2,203,000 OO XOOO X

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