Prior to these transactions, the balance sheets for the two companies were as follows: In Marshalls appraisal of Tucker, it deemed three accounts to be

Prior to these transactions, the balance sheets for the two companies were as follows:

In Marshall’s appraisal of Tucker, it deemed three accounts to be undervalued on the subsidiary’s books: Inventory by $5,000, Land by $20,000, and Buildings by $30,000. 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 1,2015.

Marshall Company Book Value Tucker Company Book Value 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, 1/1/15 60,000 270,000 360,000 200,000 420,000 160,000 (150,000) (430,000) (110,000) 20,000 90,000 140,000 180,000 220,000 50,000 (40,000) (200,000) (120,000) (360,000) (420,000) (340,000)