Pam Company issued 480,000 shares of $10 par common stock with a fair value of $10,200,000 for

Question:

Pam Company issued 480,000 shares of $10 par common stock with a fair value of $10,200,000 for all the voting common stock of Sun Company. In addition, Pam incurred the following costs:

Legal fees to arrange the business combination ........................................... $100,000

Cost of SEC registration, including accounting and legal fees ..............................48,000

Cost of printing and issuing net stock certificates .............................................12,000

Indirect costs of combining, including allocated overhead and executive salaries ....... 80,000

Immediately before the acquisition in which Sun Company was dissolved, Sun's assets and equities were as follows (in thousands):

_____________________ Book Value ____________ Fair Value

Current assets ............... $ 4,000 ......................... $ 4,400

Plant assets .................... 6,000 ............................ 8,800

Liabilities ...................... 1,200 ........................... 1,200

Common stock ................ 8,000

Retained earnings ............... 800

Required:

Prepare all journal entries on Pam's books to record the acquisition?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...