The condensed balance sheets as of December 31 for Rice and Associates and Rachel Excavation are as follows:As of December 31, the market values of Rachel€™s inventories and property, plant, and equipment were $70,000 and $120,000, respectively. Liabilities are at FMV on the balance sheet.
On December 31, Rice and Associates purchased all 10,000 of the outstanding common shares of Rachel Excavation for $180,000 cash. The preceding balance sheets were prepared immediately prior to the acquisition.

REQUIRED:
a. Prepare the journal entry recorded by Rice to recognize the acquisition.
b. Prepare a consolidated work sheet and a consolidated balance sheet.

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Rice Rachel ASSETS $ 10,000 $ 196,000 Cash Accounts receivable 40,000 150,000 40,000 Inventory 300,000 Property, plant, and equipment 130,000 400,000 Total assets $1,046,000 $220,000 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 80,000 $ 20,000 Notes payable 300,000 50,000 Common stock 540,000 100,000 Retained earnings 126,000 50,000 Total liabilities and shareholders' equity $1,046,000 $220,000