Recording a Consolidating Adjustment On January 1 of the current year, Harper Company purchased all of the common shares of Maxwell Company for $400,000 cash. Balance sheets of the two firms at the acquisition date follow. Harper Company Maxwell Company Current assets Investment in Maxwell $1,360,000 400,000 $96,000 0 Plant assets, net 2,400,000 328,000 Goodwill Total assets Liabilities Contributed capital 0 0 $4,160,000 $424,000 $560,000 $72,000 2,800,000 320,000 Retained earnings Total liabilities and equity 800,000 $4,160,000 32,000 $424,000 During purchase negotiations, Maxwell's plant assets were appraised at $340,000, and Maxwell had an unrecorded patent with a fair value of $10,000. All of the remaining assets and liabilities were appraised at values approximating their book values. The remaining $26,000 of the purchase price was ascribed to goodwill. Required a. Prepare the consolidating adjustments and the consolidated balance sheet at acquisition. Harper Maxwell Consolidating Company Company Adjustments Consolidated Current assets Investment in Maxwell $1,360,000 $96,000 0 $ 0 400,000 0 0 0 Plant assets Patent 2,400,000 328,000 0 0 0 0 0 0 Goodwill Total assets 0 0 0 0 $4,160,000 $424,000 $ 0 Liabilities Contributed capital $560,000 $72,000 2,800,000 320,000 0 $ 0 0 0 Retained earnings 800,000 32,000 0 0 Total liabilities and equity $4,160,000 $424,000 $ 0