Balance sheets for Prego Company and Sprague Company as of December 31, 2010, follow:

The fair values of Sprague Company’s assets and liabilities are equal to their book values.

Required:
Prepare a consolidated balance sheet as of January 1, 2011, under each of the following assumptions:
A. On January 1, 2011, Prego Company purchased 90% of the outstanding common stock of Sprague Company for $594,000.
B. On January 1, 2011, Prego Company exchanged 11,880 of its $20 par value common shares with a fair value of $50 per share for 90% of the outstanding common shares of Sprague Company. The transaction is apurchase.

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Prego Company ague Compan'y Cash Accounts receivable (net) Inventory Property and equipment (net) Land 700,000 892,000 544,000 1,927,000 120,000 $111,000 230,000 60,000 $468,000 94,000 $963,000 Total assets $4,183,000 Accounts pavable Notes payable Long-term debt Common stock Other contributed capital Retained earnings 302,000 588,000 350,000 1,800,000 543,000 600,000 4,183,000 $152,000 61,000 90,000 500,000 80,000 80,000 $963,000 Total equities