On January 1, 2018, Marshall Company acquired 100 percent of theoutstanding common stock of Tucker Company. To acquire theseshares, Marshall issued $313,000 in long-term liabilities and20,000 shares of common stock having a par value of $1 per sharebut a fair value of $10 per share. Marshall paid $23,000 toaccountants, lawyers, and brokers for assistance in the acquisitionand another $8,000 in connection with stock issuance costs.

Prior to these transactions, the balance sheets for the twocompanies were as follows:

	Marshall Company Book Value				TuckerCompany Book Value
Cash	$	87,700			$	33,200
Receivables		298,000				125,000
Inventory		414,000				238,000
Land		206,000				212,000
Buildings (net)		463,000				276,000
Equipment (net)		223,000				79,500
Accounts payable		(195,000	)			(60,900	)
Long-term liabilities		(500,000	)			(313,000	)
Common stock—$1 par value		(110,000	)
Common stock—$20 parvalue						(120,000	)
Additional paid-incapital		(360,000	)			0
Retained earnings, 1/1/18		(525,700	)			(469,800	)

Note: Parentheses indicate a credit balance.

In Marshall’s appraisal of Tucker, it deemed three accounts tobe undervalued on the subsidiary’s books: Inventory by $7,650, Landby $28,800, and Buildings by $37,000. Marshall plans to maintainTucker’s separate legal identity and to operate Tucker as a whollyowned subsidiary.

a) Determine the amounts that Marshall Company would report inits postacquisition balance sheet. In preparing the postacquisitionbalance sheet, any required adjustments to income accounts from theacquisition should be closed to Marshall’s retained earnings. Otheraccounts will also need to be added or adjusted to reflect thejournal entries Marshall prepared in recording the acquisition.

b) To verify the answers found in part (a), prepare a worksheetto consolidate the balance sheets of these two companies as ofJanuary 1, 2018.