Balance sheets for Salt Company and Pepper Company on December 31, 2013, follow: Salt Pepper $100,500 118,640 135,490 639,050 $993,680 $197,740 241,100 228,418 1,134,390 $1,801,648 ASSETS Cash Receivables Inventories Plant assets Total assets EQUITIES Accounts payable Mortgage payable Common stock, $20 par value Other contributed capital Retained earnings Total equities $192,870 165,030 307,090 179,390 149,300 $993,680 $264,273 173,680 967,200 294,910 101,585 $1,801,648 Pepper Company tentatively plans to issue 27,990 shares of its $20 par value stock, which has a current market value of $37 per share net of commissions and other issue costs. Pepper Company then plans to acquire the assets and assume the liabilities of Salt Company for a cash payment of $745,300 and $295,000 in long-term 8% notes payable. Pepper Company's receivables include $56,060 owed by Salt Company. Pepper Company is willing to pay more than the book value of Salt Company assets because plant assets are undervalued by $200,990 and Salt Company has historically earned above-normal profits. Prepare a pro forma balance sheet showing the effects of these planned transactions. (If an amount reduces the account balance then enter with negative sign preceding the number e.g. -5,125 or parentheses e.g. (5,125).) PEPPER COMPANY Pro Forma Balance Sheet Giving Effect to Proposed Issue of Common Stock and Note Payable for All of the Common Stock of Salt Company under Purchase Accounting December 31, 2013 Audited Pro Forma Balance Sheet Adjustments Balance Sheet $197,740 $ 241,100 Cash Receivables Inventories 228,418 Plant Assets 1,134,390 Goodwill Total Assets 1,801,648 Accounts Payable 264,273 Notes Payable, 8% Mortgage Payable 173,680 967,200 Common Stock, $20 par Additional Paid-in Capital 294,910 Retained Earnings 101,585 Total Liabilities and Equity 1,801,648