Graham Inc. acquired all of the outstanding shares of Mahoney Inc. through an exchange of common shares. The aggregate fair value of the Graham shares distributed to the Mahoney shareholders was \($400,000\). Further, at the time of the exchange, the fair value of Mahoney’s net assets was equal to their book value, except for Mahoney’s property and equipment, which was appraised at \($540,000\).

Presented below are the pre-acquisition balance sheets of the two companies:

Required
Prepare the consolidated balance sheet for the new company immediately following the transaction.

Pre-acquisition Balance Sheets Cash..... Accounts receivable (net). Inventory (FIFO) Property and equipment (net). Other assets... Accounts payable.. Other current liabilities. Bonds payable... Common stock (no par value) Retained earnings 80,000 Graham Inc. Mahoney Inc. 60,000 $ 10,000 140,000 220,000 800,000 40,000 $1,260,000 $ 100,000 120,000 500,000 20,000 $730,000 $ 25,000 15,000 100,000 240,000 350,000 500,000 250,000 320,000 90,000 $1,260,000 $730,000