AA EE EE 1 Normal No Spac... Heading 1 Heading 2 Title Paragraph Styles 6 4. (20 pts) Gray Company purchased 100% of Orange Company on January 1, 2019 for $1,000,000 by issuing 100,000 shares of its $2 par common stock with a market value of $10 per share. The book value of Orange at the time was $800,000 with half of the excess attributed to goodwill and half attributed to undervalued equipment. There were direct expenses of $20,000 and indirect expenses of $30,000. a. Record the acquisition/consolidation on January 1, 2019 on the books of Gray. b. Assume that the balance sheets immediately after the acquisition are below. Show the elimination/consolidation entries to put them together on the worksheet. Do not extend the balances. C. Gray Orange Dr. Cr. I Aa A 211 wA AaBCCD AaBbcc AaBbc Aabbcc Aab Normal No Spac. Heading 1 Heading 2 Title Paragraph Styles b. Assume that the balance sheets immediately after the acquisition are below. Show the elimination/consolidation entries to put them together on the worksheet. Do not extend the balances. Gray Orange Dr. Cr. Cash $ 100,000 $ 50,000 Receivables 50,000 20,000 Investment in Orange 1,000,000 Property & Equipment 600,000 830,000 Goodwill $1,750,000 $900,000 Liabilities Payables $ 200,000 $ 100,000 400,000 Capital Stock Additional Paid in Cap Retained Earnings 500,000 800,000 250,000 $1,750,000 400,000 $ 900,000 Focus RI