Cairo Company and Alex Company agreed to combine their operations through a pooling of interests, when the balance sheet of two companies was as the following:

A. Prepare the journal entry to record the initial exchange of stocks under the pooling of interest method under each of the following assumptions.

1. Cairo company issued 70,000 shares for all outstanding common stock of Alex company.

2. Cairo company issued 95,000 shares for all outstanding common stock of Alex Company and Prepare a post-acquisition balance sheet for Cairo company.

"Cairo Company 4,000,000 "Alex" Company 2,500,000 Current assets Plant and equipment Total assets Common stock (L.E. 50 par value for both companies Other Contributed capital 5,000,000 9,000,000 5,500,000 4,000,000 6,500,000 3,500,000 2,000,000 1,000,000 Retained earnings 1,500,000 2,000,000 Total Equity 9,000,000 6,500,000