On January 1, 2011, Marshall Company acquired 100 percent of the outstanding common stock of Tucker Company. To acquire these shares, Marshall issued $200,000 in long-term liabilities and 20,000 shares of common stock having a par value of $1 per share but a fair value of $10 per share.

Marshall paid $30,000 to accountants, lawyers, and brokers for assistance in the acquisition and another $12,000 in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows:

Marshall Company Book Value	Tucker Company Book Value
Cash	$60,000	$20,000
Receivables	270,000	90,000
Inventory	360,000	140,000
Land	200,000	180,000
Buildings (net)	420,000	220,000
Equipment (net)	$160,000	$50,000
Accounts payable	150,000	40,000
Long-term liabilities	430,000	200,000
Common stock—$1 par value	110,000
Common stock—$20 par value	120,000
Additional paid-in capital	360,000	–0–
Retained earnings, 1/1/11	420,000	340,000

In Marshall’s appraisal of Tucker, it deemed three accounts to be undervalued on the subsidiary’s books: Inventory by $5,000, Land by $20,000, and Buildings by $30,000. Marshall plans to maintain Tucker’s separate legal identity and to operate Tucker as a wholly owned subsidiary.

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 Marshall’s retained earnings.

b. To verify the answers found in part (a), prepare a worksheet to consolidate the balance sheets of these two companies as of January 2011.