Balance sheets for Salt Company and Pepper Company on December 31, 2013, follow: Salt Pepper ASSETS Cash $100,670 $178,510 Receivables 113,450 223,120 Inventories 140,990 242,396 Plant assets 693,190 1,321,040 Total assets $1,048,300 $1,965,066 EQUITIES Accounts payable $185,130 $272,654 140,220 184,480 Mortgage payable Common stock, $20 par value Other contributed capital 373,830 852,000 181,780 264,960 Retained earnings 167,340 390,972 Total equities $1,048,300 $1,965,066 Pepper Company tentatively plans to issue 32,220 shares of its $20 par value stock, which has a current market value of $34 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 $751,900 and $308,800 in long-term 8% notes payable. Pepper Company's receivables include $54,500 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 $201,270 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 Cash $178,510 $ $ $ Receivables 223,120 Inventories 242,396 Plant Assets 1,321,040 Goodwill 0 Total Assets 1,965,066 $ Accounts Payable 272,654 $ Notes Payable, 8% 0 Mortgage Payable 184,480 Common Stock, $20 par 852,000 Additional Paid-in Capital 264,960 Retained Earnings 390,972 Total Liabilities and Equity 1,965,066 $ $