On January 1, 2024, Presidio Company acquired 100 percent of the outstanding common stock of Mason Company. To acquire these shares, Presidio issued to the owners of Mason $260,000 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. Presidio paid $28,500 to accountants, lawyers, and brokers for assistance in the acquisition and another $13,500 in connection with stock issuance costs.

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

Items	Presidio Company	Mason Company
Cash	$87,900	$30,200
Receivables	$283,000	$124,000
Inventory	$406,000	$140,000
Land	$290,000	$252,000
Buildings (net)	$491,000	$227,000
Equipment (net)	$163,000	$68,100
Accounts Payable	$(211,000)	$(42,000)
Long-term Liabilities	$(488,000)	$(260,000)
Common Stock - $1 par Value	$(110,000)	$0
Common Stock - $20 par Value	$0	$(120,000)
Additional paid-in Capital	$(360,000)	$0
Retained Earnings, 1/1/24	$(551,900)	$(419,300)

Note: Parentheses indicate a credit balance.

Presidio's appraisal of Mason's fair values deemed three accounts to be undervalued: Inventory by $8,100, Land by $30,000, and Buildings by $34,600. Presidio plans to maintain Mason's separate legal identity and to operate Mason as a wholly owned subsidiary.

Required:

1. Show Presidio's journal entries to record its acquisition of Mason, related professional fees paid, and stock acquisition costs.
2. Separately determine each individual amount that Presidio Company would report in its consolidated balance sheet following the acquisition of Mason. Include in Presidio's retained earnings any adjustments to income accounts from part (a).
3. To verify the answers found in part (b), adjust Presidio's column of accounts for the journal entries in part (a) and then show a worksheet to consolidate the balance sheets of these two companies at the acquisition date.

(a)

No.	General Journal	Debit	Credit
1	Investment in Mason
	Long-term Liabilities		$260,000
	Common Stock		$20,000
	Additional paid-in Capital		$180,000
	Gain on Purchase
2	Professional service expense	$28,500
	Cash		$28,500
3	Stock Issuance Cost	$13,500
	Cash		$13,500

(b)

	Consolidated Totals
Cash
Receivables
Inventory
Land
Buildings (net)
Equipment (net)
Investment in Mason
Total Assets
Accounts Payable
Long-Term Liabilities
Common Stock
Additional paid-in Capital
Retained Earnings
Total Liabilities & Equity

(c)

	Presidio	Mason	Debit	Credit	Consolidated Totals
Cash	$45,900	$30,200			$76,100
Receivables	$283,000	$124,000			$407,000
Inventory	$406,000	$140,000
Land	$290,000	$252,000
Buildings (net)	$491,000	$227,000
Equipment (net)	$163,000	$68,100
Investment in Mason
Total Assets
Accounts Payable	$(211,000)	$(42,000)			$(253,000)
Long-Term Liabilities	$(748,000)	$(260,000)			$(1,008,000)
Common Stock	$(130,000)	$(120,000)	$120,000		$(130,000)
Additional paid-in Capital	$(526,500)				$(526,500)
Retained Earnings		$(419,300)
Total Liabilities & Equity