Pancor Corporation paid cash of $178,000 to acquire Sink Company’s net assets on February 1, 20X3. The balance sheet data for the two companies and fair value information for Sink immediately before the business combination were

Required

a. Give the journal entry recorded by Pancor Corporation when it acquired Sink’s net assets.

b. Prepare a balance sheet for Pancor immediately following the acquisition.

c. Give the journal entry to be recorded by Pancor if it acquires all of Sink’s common stock (instead of Sink’s net assets) for $178,000.

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Balance Sheet Item Cash Accounts Receivable Inventory Patents Buildings & Equipment Less: Accumulated Depreciation Total Assets Accounts Payable Notes Payable Common Stock: $10 par value $6 par value Additional Paid-In Captal Retained Earnings Total Liabilities & Equities Pancor Corporation Book Value $240,000 140,000 170,000 80,000 380,000 (190,000) $620,000 $ 85,000 150,000 200,000 160,000 225,000 $820,000 Sink Company Book Value $ 20,000 35,000 30,000 40,000 310,000 (200,000) $235,000 $ 55,000 120,000 18,000 10,000 32,000 $235,000 Fair Value $20,000 35,000 50,000 60,000 150,000 $315,000 $ 55,000 120.000