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On January 1, 2018, Marshall Company acqulred 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall Issued $265,000 In long-term labilities and 20,000 shares of common stock having a par value of $1 per share but a fair value of $10 per share. Marshall pald $29,500 to accountants, lawyers, and brokers for assistance In the acquisltion and another $14,500 In connection with stock Issuance costs. Prior to these transactions, the balance sheets for the two companles were as follows: Marshall Company Book Value $ 68,688 Tucken Company Book Value 31,288 188,880 177,808 191,808 262,8e8 Cash Receivables Inventory Land Buildings (net) Equipment (net) Accounts payable Long-term liabilities Common stock-$1 par value Common stock-$28 par value Additional paid-in capital Retained earnings, 1/1/18 295,8e8 413,808 243,800 491,888 238,8ee 72,3ee (62,488) (162,888) (581,90) (265,808) (118,808) (128,808) (368,888) (599,688) (394,18) Note: Parentheses Indicate a credit balance In Marshalls appralsal of Tucker, It deemed three accounts to be undervalued on the subsidlarys books: Inventory by $5,000, Land by $14.400, and Bulldings by $25.000. Marshall plans to malntain Tuckers separate legal Identity and to operate Tucker as a wholly owned subsldlary. 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 Marshalls retalned earnings. Other accounts will also need to be added or adjusted to reflect the journal entries Marshall prepared In recording the acquisition. b. To vertfy the answers found In part (a), prepare a worksheet to consolidate the balance sheets of these two companles as of January 1, 2018Required A Required B 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 Marshalls retained earnings. Other accounts will also need to be added or adjusted to reflect the journal entries Marshall prepared in recording the acquisition. Consolidated Totals Cash Receivables Inventory Land Buildings (net Equipment (net) Total assets Accounts payable Long-term liabilities Common stock Additional paid-in capital Retained earnings Total liabilities and equitiesRequired A Required 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, 2018. (For accounts where multiple consolidation entries are required, combine all debit entries into one amount and enter this amount in the debit column of the worksheet. Similarly, combine all credit entries into one amount and enter this amount in the credit column of the worksheet.) Show less ▲ MARSHALL COMPANY AND CONSOLIDATED SUBSIDIAR Worksheet January 1, 2018 Consolidation Entries Consolidated Marshall Tucker Accounts Company Company Totals Credit Cash Receivables Inventory Land Buildings (net) Equipment (net) Investment in Tucker Total assets Accounts payable Long-term liabilities Common stock Additional paid-in capital Retained earnings, 1/1/18 Total liabilities and owners equities

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Part a. Marshall and Tucker Consolidated Balances $ 558,500 394100+120000+5000+14400+25000 Fair value of net assets acquired Fair value of consideration transferred Gain on bargain purchase Working: 465,000 265000+20000 10 $ 93,500 General Journal Account Debit Credit Investment in Tucker Long-Term Liabilities Common Stock (par value) Additional Paid-In Capital Gain on Bargain Purchase 558,500 265,000 20,000 180,000 93,500 Professional Fees 29,500 Cash 29,500 Additional Paid-In Capital 14,500 Cash 14,500 Working Consideration transferred at fair value Book value (assets minus liabilities 465,000 or stockholders equity) Book value in excess of consideration transferred 514,100 (49,100) Allocation to specific accounts based on fair value: Inventory Land Buildings 5,000 14,400 25,000 44,400 Gain on bargain purchase (excess net asset fair value over consideration transferred) 93,500 Account Name Cash Receivables Inventor Land Buildings Equipment Total Assets Accounts Payable Long-term Liabilities Common Stock Additional Paid-In Capital Retained Earnings Total Liabilities & Equity Balance Explanation $47,800 60600+31200-29500-14500 $ 403,000 295000+108000 $ 595,000 413000+177000+5000 $ 448,400 243000+191000+14400 $ 778,000 491000+262000+25000 $302,300 230000+72300 $ 2,574,500 $ 224,400 162000+62400 $ 1,031,000 501000+265000+265000 $ 130,000 110000+20000 $ 525,500 360000-14500+180000 $ 663,600 599600-29500+93500 $ 2,574,500Part b. Marshall and Tucker Consolidated Worksheet Consolidation Worksheet Marshal Tucker Company Company Consolidation Entries Consolidated Totals Debit Credit Accounts Cash 60600-29500-14500 Receivables Inventory Land Buildings (net) Equipment (net) Investment in Tucker $ 16,600 $ 31,200 295,000 108,000 413,000 177,000 [A]5,000 243,000 191,000 [A] 14,400 491,000 262,000 [A]25,000 230,000 558,500 47,800 403,000 595,000 448,400 778,000 302,300 72,300 [S] 514,100 A] 44,400 Total assets S 2,247,100 $ 841,500 2,574,500 (224,400) (1,031,000) (130,000) (525,500) (663,600 558,500 (2,574,500) $ (162,000) $ (62,400) Accounts payable Long-term liabilities 501000+265000 Common stock 110000+20000 Additional paid-In capital 360000+180000-14500 Retained earnings, 1/1/18 599600-29500+93500 Total liab. and owners equity (766,000) (265,000) (130,000) (120,000) [S] 120,000 (525,500) (663,600) (394,100) [S] 394,100 $(2,247,100) $(841,500) 558,500

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