On January 1, 2017, Pal Products Corporation issues 12,000 shares of its P10 par value stock to acquire the net assets of Tan Company. Underlying book value and fair value information for the statement of financial position items of Tan Company at the time of acquisition are as follows: Book Value Fair Value Cash 60,000 P 60,000 Accounts Receivable 100,000 100,000 Inventory (lifo basis) 60,000 115,000 Land 50,000 70,000 Buildings and Equipment 400,000 350,000 Less: Accumulated Depreciation (150,000) Total Assets 520,000 * Accounts Payable P 10,000 Bonds Payable 200,000 Common Stock (PS par value) 150,000 | Additional Paid-in Capital 70,000 | Retained Earnings 90,000 | Total Liabilities and Equities 520,000 | Tan Company shares were selling at P18 and Pal Products Corporation shares were selling at P50 just before the merger announcement, Additional cash payments made by Pal Products Corporation in completing the acquisition were: Broker’s fee paid to firm that located Tan Company 10,000 Audit fee for stock issued by Pal Products Corporation 12,000 Cost of SEC registration of Pal Products Corporation shares 6,000 Required: Prepare all journal entries to be recorded on Pal Products Corporation's books. TeBusiness Combinatc inations 4” a Papa Corporati under whieh Pepa ta Mam Company have announced tems ofan exchange agroeme™e stock to acquire at joo ation will issue 8,000 shares of its P10 par value comment are trading BS ag S852 of Mama Company. Papa Corporation shares currently Book value and a fama Company's PS par value shares are trading at P18 each ee ‘Value statement of financial position data on January 1, 2017, are Papa Corporation __Mama Company lems Book Value Fair Value Book Value Fair Value Cash and Receivables 150000 -P1s0.000 —-P 40,000 -—P_40,000 i : 100,000 170,000 50,000 85,000 Buildings and Equipment (net) 300,000 400,000 160,000 _ 230,000 Total Assets 550,000 720,000 _P250,000 5,000 Common Stock 200,000 100,000 Additional Paid-in Capital 20,000 10,000 Retained Earnings 330,000 140,000 Total Equities 550,000 250,000 Required: What will be the amount reported immediately following the business combination for each of the following items in the company’s combined Statement of Financial Position. 1, Common Stock 2. Cash and Receivables 3. Land 4. Buildingsand Equipment (net) 5. Goodwill 6. Additional Paid-in Capital 7, Retained EamingsThe following S fement of Financ Position were prepared for Red and Blue Corporations on January |, 2017, just before they entered into a business combination: Red Corporation Items Book Value Fair value Book Value Fair Value Cash and Receivables P- 300,000 P 300,000 P 50,000 S0.099 Inventory 400,000 600,000 100,000 245,000 Buildings and Equipment 800,000 870,000 300,000 250,000 Less: Accumulated Depreciation (200,000) (150,000) Total Assets P1,300,000 P1,770,000 300,000 P45,009 Accounts Payable P 100,000 P 100,000 40,000 P4009 Bonds Payable 400,000 440,000 60,000 85,000 Common Stock: P10 par value 300,000 PS par value 100,000 Additional Paid-in Capital 100,000 20,000 Retained Earnings 400,000 Total Liabi P1,300,000 Required: Assume that Red Corporation acquires the net assets of Blue Corporation by issuing 15,000 shares of stock. Prepare a Statement of Financial Position for the combined company immediately after the acquisition if the market price of Red Corporation shares is (1) P40 and (2) P20 at the time the acquisition occurs.