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Balance sheets for Salt Company and Pepper Company on December 31, 2013, follow: Salt Pepper ASSETS Cash $95.300 $165.270 Receivables 120,020 232,120 Inventories 135.460 216,607

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Balance sheets for Salt Company and Pepper Company on December 31, 2013, follow: Salt Pepper ASSETS Cash $95.300 $165.270 Receivables 120,020 232,120 Inventories 135.460 216,607 Plant assets 627,110 1.115,820 Total assets $977.890 $1.729,817 $190,590 $267.172 139,640 184,030 EQUITIES Accounts payable Mortgage payable Common stock, $20 par value Other contributed capital Retained earnings Total equities 339.390 942.100 180, 180 248,580 128,090 87,935 $977,890 $1.729.817 Pepper Company tentatively plans to issue 32,690 shares of its $20 par value stock, which has a current market value of 539 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 $819.100 and $301,600 in long-term 8% notes payable. Pepper Company's receivables include 560,460 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 $215,250 and Salt Company has historically earned above normal profits. Prepare a pro forma balance sheet showing the effects of these planned transactions. Of an amount reduces the account balance then enter with negative sin preceding the number es-5.125 or parentheses es (5,125)) He wulgacung Wie JPN 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 Cash $165,270 Receivables 232,120 Inventories 216,607 Plant Assets 1.115,820 Goodwill 0 $ Total Assets 1,729,817 Accounts Payable 267.172 Notes Payable. 896 0 Mortgage Payable 184,030 Common Stock, $20 par 942,100 Additional Paid-in Capital 248,580 Retained Earnings 87,935 s Total Liabilities and Equity 1,729,817

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