EXERCISE 2-3 Amset Purchase, Cash and Stock Pretzel Company acquired the assets (except for cash) and assumed the liabilities of Salt Com- pany on January 2, 2012. As compensation, Pretzel Company gave 30,000 shares of its common stock, 15,000 shares of its 10% preferred stock, and cash of $50,000 to the stockholders of Salt Company. On the acquisition date, Pretzel Company stock had the following characteristics PRETZEL COMPANY Stock Par Value Fair Value Common $ 25 Preferred 100 100 Immediately prior to the acquisition, Salt Company's balance sheet reported the following book values and fair values: SALT COMPANY Balance Sheet January 2. 2012 Book palur Fair value S 165.000 $ 165,000 198,000 330,000 Cash Accounts receivable (net of $11,000 allowance) Inventory-LIFO cost Land 220,000 275,000 396,000 144.000 550,000 1,144.000 Buildings and eqpme (ner) Total assets $2.200,000 $2.387,000 S 275.000 450,000 S 275.000 495.000 Current liabilities Bonds Payable, 10% Common stock, $5 par value Other contributed capital Retained earnings 770.000 396,000 309,000 Total liabilities and siockholders equity $2 200,000 Required: Prepare the journal entry on the books of Pretzel Company to record the acqsition of the assets and asSumption of the liabilities of Salt Company