Required A Required B Determine the amounts that Marshall Company would report in its postacquisition balance sheet. In preparing the postacquisition balance sheet, any required adjustments to income accounts from the acquisition should be closed to Marshall's 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.) Show less Consolidated Totals Cash $ 79,800 Receivables 461,000 Inventory 572,350 Land 514,000 Buildings (net) 731,200 Equipment (net) 253,000 Total assets $ 2,611,350 Accounts payable $ 260,500 Long-term liabilities 1,116,000 Common stock 130,000 Additional paid-in capital 360,000 Retained earnings 664,000 Total liabilities and equities $ 2,530,500 On January 1, 2021, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall issued $295,000 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 $23,500 to accountants, lawyers, and brokers for assistance in the acquisition and another $8,500 in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Cash Receivables Inventory Land Buildings (net) Equipment (net) Accounts payable Long-term liabilities Common stock-$1 par value Common stock-$20 par value Additional paid-in capital Retained earnings, 1/1/21 Marshall Tucker Company Company Book Value Book Value $ 87,000 $ 24,800 314,000 147,000 393,000 171,000 230,000 268,000 480,000 221,000 190,000 63,000 (214,000) (46,500) (526,000) (295,000) (110,000) (120,000) (360,000) (484,000) (433,300) Note: Parentheses indicate a credit balance. In Marshall's appraisal of Tucker, it deemed three accounts to be undervalued on the subsidiary's books: Inventory by $8,350, Land by $16,000, and Buildings by $30,200. Marshall plans to maintain Tucker's separate legal identity and to operate Tucker as a wholly owned subsidiary. a. Determine the amounts that Marshall Company would report in its postacquisition balance sheet. In preparing the postacquisition balance sheet, any required adjustments to income accounts from the acquisition should be closed to Marshall's retained earnings. Other accounts will also need to be added or adjusted to reflect the journal entries Marshall prepared in recording the acquisition. 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. Required A 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.) Show less Consolidated Totals MARSHALL COMPANY AND CONSOLIDATED SUBSIDIARY Worksheet January 1, 2021 Marshall Tucker Consolidation Entries Accounts Company Company Debit Credit Cash $ 24,800 Receivables Inventory Land Buildings (net) Equipment (net) Investment in Tucker Total assets $ 24,800 $ 0 Accounts payable Long-term liabilities Common stock Additional paid-in capital Retained earnings, 1/1/21 Total liabilities and equities $ 0 $ 0 $ 0 $ $ 0 TA 0 $ 0
