Balance sheets for Salt Company and Pepper Company on December 31, 2013, follow:

		Salt		Pepper
ASSETS
Cash		$97,130		$183,620
Receivables		118,880		248,880
Inventories		138,730		241,372
Plant assets		711,180		1,121,360
Total assets		$1,065,920		$1,795,232
EQUITIES
Accounts payable		$177,840		$245,513
Mortgage payable		154,910		190,000
Common stock, $20 par value		317,030		870,400
Other contributed capital		185,880		253,410
Retained earnings		230,260		235,909
Total equities		$1,065,920		$1,795,232

Pepper Company tentatively plans to issue 27,540 shares of its $20 par value stock, which has a current market value of $39 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 $865,900 and $288,400 in long-term 8% notes payable. Pepper Companys receivables include $55,450 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 $234,090 and Salt Company has historically earned above-normal profits. Prepare a pro forma balance sheet showing the effects of these planned transactions.

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		$183,620		$		$
Receivables		248,880
Inventories		241,372
Plant Assets		1,121,360
Goodwill		0
Total Assets		1,795,232				$
Accounts Payable		245,513				$
Notes Payable, 8%		0
Mortgage Payable		190,000
Common Stock, $20 par		870,400
Additional Paid-in Capital		253,410
Retained Earnings		235,909
Total Liabilities and Equity		1,795,232