34. On December 31, Pacifica, Inc., acquired 100 percent of the voting stock of Seguros Company 7 Pacifica will maintain Seguros as a wholly owned subsidiary with its own legal and accounting identity. The consideration transferred to the owner of Seguros included 50,000 newly issued Pacifica common shares ($20 market value, $5 par value) and an agreement to pay an additional S130,000 cash if Seguros meets certain project completion goals by December 31 of the following year. Pacifica estimates a 50 percent probability that Seguros will be successful in meeting these goals and uses a 4 percent discount rate to represent the time value of money Immediately prior to the acquisition, the following data for both firms were available: Seguros Book Values Seguros Fair Values Pacifica Revenues .. Expenses $(1,200,000) 875,000 325.000 $(950,000) (325,000) 90,000 Retained earnings, 1/1. Net income. . . Dividends declared. Retained earnings, 12/31.. Cash Receivables and inventory $1.185,000) S 110,000 85,00085,000 180,000 600,000 200,000 750,000 1,400,000 300,000 $ 2,560,000 190,000 450,000 160,000 $885,000 IProperty. plant, and equipment Total assets Liabilities Common stock $ (500,000) (180,000) $(180,000) (400,000) (200,000) Pacifica Book Values Fair Values Revenues $(1,200,000) 875,000 ....$ (325,000 Net income. ..$ (950,000) (325,000) 90,000 $(1.185,000 Net income. Dividends declared. Retained earnings, 12/31 . Cash Receivables and inventory Property. plant, and equipment Trademarks 110,000 85000 $85,000 750,000 1.400,000 300,000 $2,560,000 190,000 180,000 600,000 200,000 450,000 160,000 $885000 Total assets Liabilities... . Common stock . Additional paid-in capital Retained earnings.. (500,000) $(180,000) $(180,000) (200,000) (70,000) (435,000) (400,000) (475,000) (1,185,000) Total liabilities and equities. $2,560 000 $885 000) In addition, Pacifica assessed a research and development project under way at Seguros to have a fair value of S100.000. Although not yet recorded on its books, Pacifica paid legal fees of S15,000 in connection with the acquisition and $9,000 in stock issue costs. Prepare the following: a. Pacifica's entries to account for the consideration transferred to the former owners of Seguros. the direct combination costs, and the stock issue and registration costs. (Use a 0961538 present value factor where applicable.) A postacquisition column of accounts for Pacifica. A worksheet to produce a consolidated balance sheet as of the acquisition date. b. c