On December 31. Pacifica. Inc., acquired 100 percent of the voting stock of Seguros Company Pacifica will maintain Seguros as a wholly owned subsidiary with its own legal and accounting identity. The consideration transferred to the owner of Seguros included 50,000 newly issued Pacifica common shares ($20 market value, $5 par value) and an agreement to pay an additional $130.000 cash if Seguros meets certain project completion goals by December 31 of the following year. Pacifica estimates a 50 percent probability that Seguros will be successful in meeting thee goals and uses a 4 percent discount rate to represent the time value of money. Immediately prior to the acquisition. the following data for both firms were available:

In addition. Pacifica assessed a research and development project under way at Seguros to have a fair value of $100.000. Although not yet recorded on its books. Pacifica paid legal fees of $15,000 in connection with the acquisition and S9,000 in stock issue costs. Prepare the following: 

a. Pacifica's entries to account for the consideration transferred to the former owners of Seguros the direct combination costs, and the stock issue and registration costs. (Use a 0.961538 Present value factor where applicable.) 

b. A postacquisition column of accounts for Pacifica. 

c. A worksheet to produce a consolidated balance sheet as of the acquisition date.

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Seguros Book Values Fair Values Seguros Pacifica Revenues. Expenses S(1,200,000) 875,000 $ (325.000) $ (950,000) (325,000) 90,000 $(1,185,000) $ 110,000 $ Net income Retained earnings, 1/1 Net income ....... Dividends declared Retained earnings, 12/31 Cash. Receivables and inventory. Property, plant, and equipmer Trademarks. 85,000 $ 85,000 *... 750,000 180,000 600,000 200,000 190,000 ..... 1,400,000 300,000 $ 2,560.000 S 885,000 $ (500,000) $ (180,000) $ (180,000 (400,000) (475,000) (1,185,000) $(2,560,000) S (885,000) 450,000 160,000 Total assets Liabilities Common stock Additional paid-in capital Retained earnings (200,000) (70,000) Total liabilities and equities (435,000) .......