REFERENCE: 02-07

Presented below are the financial balances for the Boxwood Company and the Tranz Company as of December 31, 2021, immediately before Boxwood acquired Tranz. Also included are the fair values for Tranz Company's net assets at that date.

	Boxwood	Tranz Co.	Tranz Co
	Book Value	Book Value	Fair Value
	12/31/21	12/31/21	12/31/21
Cash	$ 870,000	$ 240,000	$ 240,000
Receivables	660,000	600,000	600,000
Inventory	1,230,000	420,000	580,000
Land	1,800,000	260,000	250,000
Buildings (net)	1,800,000	540,000	650,000
Equipment (net)	660,000	380,000	400,000
Accounts payable	570,000	240,000	240,000
Accrued expenses	270,000	60,000	60,000
Long-term liabilities	2,700,000	1,020,000	1,120,000
Common stock ($20 par)	1,980,000
Common stock ($5 par)		420,000
Additional paid-in capital	210,000	180,000
Retained earnings	1,170,000	480,000
Revenues	2,880,000	660,000
Expenses	2,760,000	620,000

Assume a business combination took place at December 31, 2017. Boxwood issued 50,000 shares of its common stock with a fair value of $35 per share for all of the outstanding common shares of Tranz. Stock issuance costs of $15 ,000 and direct costs of $10,000 were paid to effect this acquisition transaction. To settle a difference of opinion regarding Tranzs fair value, Boxwood promises to pay an additional $5,200 to the former owners if Tranzs earnings exceed a certain sum during the next year. Given the probability of the required contingency payment and utilizing a 4% discount rate, the expected present value of the contingency is $5,000

Calculate the amount paid (consideration) for the acquisition of Common Shares Tranz Company and prepare the journal entry to record the acquisition

Prepare analysis to Determine the Valuation Difference

Prepare the journal entries for the consolidation Adjustment

Prepare a Working Paper por the Consolidated Balance Sheet as of December 31 2021