Linger Corporation purchased all the outstanding common stock of Chrissy Foods, Inc. on December 31, 1996. Just before the purchase, the condensed balance sheets of the two companies appeared as follows:

Linger used current assets of \(\$ 1,200,000\) to acquire the stock of Chrissy Foods. The excess of this purchase price over the book value of Chrissy Foods' net assets is determined to be attributable \(\$ 81,000\) to Chrissy Foods' plant and equipment and the remainder to goodwill.
\section*{Instructions}

(a) Prepare the entry for Linger's acquisition of Chrissy Foods, Inc. stock.

(b) Prepare a consolidated work sheet at December 31, 1996.

(c) Prepare a consolidated balance sheet at December 31, 1996.

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Current assets Plant and equipment (net) Current liabilities Common stock Retained earnings Linger Corporation $1,480,000 2,100,000 $3,580,000 $ 578,000 1,950,000 1,052,000 $3,580,000 Chrissy Foods, Inc. $ 439,500 672,000 $1,111,500 $ 92,500 525,000 494,000 $1,111,500