4110- 1.6

Plint Corporation exchanged shares of its $2 par common stock for all of Sark Company's assets and liabilities in a planned merger Immediately prior to the combination, Sark's assets and liabilities were as follows: Assets Cash & Equivalents Accounts Receivable Inventory Land Buildings Equipment Accumulated Depreciation Total Assets $ 41,000 73,000 144,000 200,000 1,520,000 638,000 431, 000 $2,185, 000 Liabilities & Equities Accounts Payable Short-Term Notes Payable Bonds Payable Common Stock ($10 par) Additional Paid-In Capital Retained Earnings Total Liabilities&Equities $35,000 50,000 500,000 1,000,000 325,000 275,000 $2,185,000 Immediately prior to the combination, Plint reported $250,000 additional paid-in capital and $1,350,000 retained earnings. The fair values of Sark's assets and liabilities were equal to their book values on the date of combination except that Sark's buildings were worth $1,500,000 and its equipment was worth $300,000. Costs associated with planning and completing the business combination totaled $38,000, and stock issue costs totaled $22,000. The market value of Plint's stock at the date of combination was $4 per share