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.

Required A

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. (Input all amounts as positive values.)

	Consolidated 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 equity

Required 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, 2021. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet. Input all amounts as positive values.)

MARSHAL COMPANY AND CONSOLIDATED SUBSIDIARY
Worksheet
January 1, 2021
Accounts	Marshal Company	Tucker Company	Consolidation Entries Debit | Credits	Cosolidated Totals
Cash
Receivables
Inventory
Land
Buildings (net)
Equipment (net)
Investment in Tucker
Total assets
Accounts payable
Long-term liabiilities
Common stock
Additional paid-in capital
Retained earnings, 1/1/21
Total liabilities and equities