Problem $2-29($Algo$)($LO $2-4,2-5,2-6$b$,2-6$c$,2-7)$

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 $$267,000$ in long$-$term liabilities and $20,000$ shares of common stock having a par value of $$1$ per share but a fair value of $$10$ per share. Presidio paid $$22,000$ to accountants, lawyers, and brokers for assistance in the acquisition and another $$7,000$ 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 $ $60,900$ $ $38,600$

Receivables $277,00091,000$

Inventory $411,000192,000$

Land $215,000224,000$

Buildings $($net$)501,000276,000$

Equipment $($net$)220,00050,700$

Accounts payable $(226,000)(54,300)$

Long$-$term liabilities $(493,000)(267,000)$

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, $1/1/24(495,900)(431,000)$

Note: Parentheses indicate a credit balance.

Presidio$$s appraisal of Mason's fair values deemed three accounts to be undervalued: Inventory by $$7,400,$ Land by $$33,000,$ and Buildings by $$42,000.$ Presidio plans to maintain Mason$$s separate legal identity and to operate Mason as a wholly owned subsidiary.

Required:

Prepare Presidio's journal entries to record its acquisition of Mason, related professional fees paid, and stock acquisition costs.

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$).$

To verify the answers found in part $($b$),$ adjust Presidio's column of accounts for the journal entries in part $($a$)$ and then prepare a worksheet to consolidate the balance sheets of these two companies at the acquisition date.