Exercise 2: Prepare balance sheet after acquisition. Comparative balance sheets for Pop and Son Corporations at December 31, 2015, are as follows: Pop Son Current assets $2,080,000 $960,000 Land 800,000 1,600,000 Buildings-net 4,800,000 1,600,000 Equipment-net 3,520,000 3,840,000 Total assets $11.200,000 $8,000,000 Current liabilities Capital stock, $10 par Additional paid-in capital Retained earnings Total equities $800,000 8,000,000 800,000 1,600,000 $11,200,000 $960,000 3,200,000 2,240,000 1,600,000 $8,000,000 On January 2, 2016, Pop issues 240,000 shares of its stock with a market value of $40 per share for all the outstanding shares of Son Corporation in an acquisition. Son is dissolved. The recorded book values reflect fair values, except for the buildings of Pop, which have a fair value of $6,4000,000, and the current assets of Son, which have a fair value of $1,600,000. Pop pays the following expenses in connection with the business combination: Cost of registering and issuing securities Other direct costs of combination $240,000 (Direct Cost) $400,000