P1-4 Bargain purchase, allocation schedule, and balance sheet The balance sheets for Pablo Corporation and Diego Corporation at December 31, 2016 are summarized as follows in thousands): Pablo Corporation Book Value Fair Value Diego Corporation Book Value Fair Value $100 $100 $40 30 80 $40 30 100 150 100 Assets Cash Receivables-net Inventories Land Buildings-net Equipment-net Total assets Equities Accounts payable Other liabilities Common stock, $10 par Other paid-in capital Retained earnings Total equities $580 $300 $395 $ 50 $ 80 100 200 90 $580 $300 On January 1, 2017, Pablo Corporation acquired all of Diego Corporation's outstanding common stock for $250,000. Pablo paid $50,000 in cash and issued a five-year, 10 percent note for the balance, Diego was dissolved. REQUIRED 1. Prepare a schedule to show how the investment cost is allocated to identifiable assets and liabilities. 2. Prepare a balance sheet for Pablo Corporation on January 1, 2017, immediately after the acquisition