The balance sheets of Petrello Company and Sanchez Company as of January 1, 2024, are presented below. On that date, after an extended period of negotiation, the two companies agreed to merge. To effect the merger, Petrello Company is to exchange its unissued common stock for all the outstanding shares of Sanchez Company in the ratio of 1/2 share of Petrello for each share of Sanchez. Market values of the shares were agreed on as Petrello, $48; Sanchez, $24. The fair values of Sanchez Company’s assets and liabilities are equal to their book values with the exception of plant and equipment, which has an estimated fair value of $720,000.

Required:
Prepare a balance sheet for Petrello Company immediately after the merger.

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Cash Receivables Inventories Plant and equipment (net) Total assets Liabilities Common stock, $16 par value Other contributed capital Retained earnings Total equities Petrello $ 480,000 480,000 2,000,000 3,840,000 $ 6,800,000 $ 1,200,000 3,440,000 400,000 1,760,000 $ 6,800,000 Sanchez $ 200,000 240,000 240,000 800,000 $1,480,000 $ 320,000 800,000 -0- 360,000 $1,480,000