On January 2, 2011, Pet Corporation enters into a business combination with Sea Corporation in which Sea is dissolved. Pet pays $1,650,000 for Sea, the consideration consisting of 66,000 shares of Pet $10 par common stock with a market value of $25 per share. In addition, Pet pays the following expenses in cash at the time of the merger:

Finders' fee $ 70,000

Accounting and legal fees 130,000

Registration and issuance costs of securities 80,000

$280,000

Balance sheet and fair value information for the two companies on December 31, 2010, immediately before the merger, is as follows (in thousands):

REQUIRED:

Prepare a balance sheet for Pet Corporation as of January 2, 2011, immediately after the merger, assuming the merger is treated as anacquisition

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Pet Book Value Sea Fair Value Sea Book Value $ 300 460 $ 60 100 160 200 $ 60 80 Cash Accounts receivable-net 240 300 Inventories Land 1,040 800 Buildings-net Equipment-net 2,000 1,000 400 600 600 500 $1,520 Total assets $5,600 $ 600 $1,780 $ 80 400 600 Accounts payable Note payable Capital stock, $10 par Other paid-in capital Retained earnings Total liabilities and owners' equity $80 1,200 1.600 1,200 1,000 $5,600 360 100 340 $1,520