On July 31, Porter Ltd. purchased Rachel Excavation Inc. for $1.9 million cash. Immediately before the acquisition on July 31, the statements of financial position for the two companies were as follows:On July 31, the market values of Rachel’s inventories and equipment were $1.3 million and $1.7 million, respectively. The carrying amount of Rachel’s liabilities was equal to their fair market values.

Required 

a. Prepare the journal entry recorded by Porter to recognize the acquisition. 

b. Prepare a consolidated work sheet and a consolidated statement of financial position at July 31.

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Assets Cash Accounts receivable Inventory Capital assets Total assets Liabilities and Shareholders' Equity Accounts payable Long-term liabilities Common shares Retained earnings Total liabilities and shareholders' equity Porter $ 2,960,000 1,500,000 3,000,000 4,000,000 $11,460,000 $ 2,500,000 2,300,000 5,400,000 1,260,000 $11,460,000 Rachel $ 100,000 400,000 1,000,000 1,600,000 $3,100,000 $ 400,000 1,300,000 900,000 500,000 $3,100,000