34. On December 31, Pacifica, Inc., acquired 100 percent of the voting stock of Seguros Company. 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 $130,000 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 Revenues ....... Expenses ... Net income..... Retained earnings, 1/1........ Net income... Dividends declared.... Retained earnings, 12/31 ....... Cash ....... Receivables and inventory. Property, plant, and equipment. Trademarks ..... Total assets ....... Pacifica $(1,200,000) 875,000 $ (325,000 $ (950,000) (325,000) 90,000 $(1,185,000) $ 110,000 750,000 1,400,000 300,000 $ 2,560,000 $ (500,000) (400,000) (475,000) (1,185,000) $(2,560,000 $ 85,000 180,000 600,000 200,000 $ 85,000 190,000 450,000 160,000 $ 885,000 $(180,000) (200,000) (70,000) (435,000) $(885,000) $(180,000) Liabilities.. Common stock .. Additional paid-in capital.... Retained earnings. Total liabilities and equities..... In addition, Pacifica assessed a research and development project under way at Seguros to have a fair value of $100,000. Although not yet recorded on its books, Pacifica paid legal fees of $15,000 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 0.961538 present value factor where applicable.) b. A postacquisition column of accounts for Pacifica. c. A worksheet to produce a consolidated balance sheet as of the acquisition date