The Chan Corporation purchased the net assets (existing liabilities were assumed) of the Tonta Company for $900,000 cash. The balance sheet for the Tonta Company on the date of acquisition showed the following:

Assets
Current assets	$100,000
Equipment	300,000
Accumulated depreciation	(100,000)
Plant	600,000
Accumulated depreciation	(250,000)
Total	$650,000
Liabilities and Equity
Bonds payable, 8%	$200,000
Common stock, $1 par	100,000
Paid-in capital in excess of par	200,000
Retained earnings	150,000
Total	$650,000

Required:

The equipment has a fair value of $300,000, and the plant assets have a fair value of $500,000. Assume that the Chan Corporation has an effective tax rate of 40%. Prepare the entry to record the purchase of the Tonta Company for each of the following separate cases with specific added information:

a.	The sale is a nontaxable exchange to the seller that limits the buyer to depreciation and amortization on only book value for tax purposes.
b.	The bonds have a current fair value of $190,000. The transaction is a taxable exchange.
c.	There are $100,000 of prior-year losses that can be used to claim a tax refund. The transaction is a taxable exchange.
d.	There are $150,000 of past losses that can be carried forward to future years to offset taxes that will be due. The transaction is a nontaxable exchange.

2. The following are preliminary financial statements for Black Co. and Blue Co. for the year ending December 31, 2018, prior to Blacks acquisition of Blue Co.

	Black Co.	Blue Co.
Sales	$360,000	$228,000
Expenses	(240,000)	(132,000)
Net income	$120,000	$ 96,000
Retained earning, January 1, 2018	$480,000	$252,000
Net income (from above)	120,000	96,000
Dividends paid	(36,000)	-0-
Retained earnings, December 31, 2018	$564,000	$348,000
Current assets	$360,000	$120,000
Land	120,000	108,000
Building (net)	480,000	336,000
Total assets	$960,000	$564,000
Liabilities	$108,000	$132,000
Common stock	192,000	72,000
Additional Paid-In Capital	96,000	12,000
Retained earnings, December 31, 2018	564,000	348,000
Total liabilities and stockholders equity	$960,000	$564,000

On December 31, 2018 (subsequent to the preceding statements), Black exchanged 10,000 shares of its $10 par value common stock for all of the outstanding shares of Blue. Black's stock on that date has a fair value of $50 per share. Black was willing to issue 10,000 shares of stock because Blue's land was appraised at $204,000. Black also paid $14,000 to attorneys and accountants who assisted in creating this combination.

Required:

Assuming that these two companies retained their separate legal identities, prepare a financial statements consolidation as of December 31, 2018.