On January 1, 2013, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall issued $223,750 in long term liabilities and 21,200 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Marshall paid $21,100 to accountants, lawyers, and brokers for assistance in the acquisition and another $16,550 in connection with stock issuance costs.

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 $6,500, Land by $21,450, and Buildings by $43,800. Marshall plans to maintain Tucker’s separate legal identity and to operate Tucker as a wholly owned subsidiary.

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. (Input all amounts as positive values.)

Prepare a worksheet to consolidate the balance sheets of these two companies as of January 1, 2013. (Leave no cells blank be certain to enter “0” wherever required. Enter the consolidation entries of ‘Investment in Tucker Company’ in order of (S) Elimination of subsidiary’s stockholders’ equity and (A) Allocation of Tucker’s consideration fair value in excess of book value. Input all amounts as positive values except for the credit balances which should be entered with the minus sign.)

Consolidation Entries