LO 1, 3 EXERCISES E2.1 Recording a Merger and a Stock Acquisition The Pack Company paid $2,000,000 in cash to the shareholders of the Sack Company for all of Sack's outstanding shares. Attorneys' fees related to the combination were $50,000, paid in cash. A comparison of the book and fair values of Sack's assets and liabilities appears below: Cash and receivables.. Marketable securities Inventory.. Plant assets.. Current liabilities. Long-term debt Net.assets Book Value. Fair Value $ 120,000 175,000 $ 120,000 150,000 610,000 800,000 1,600,000 2,000,000 (340,000) (340,000) (1,090,000) (980,000) $1,075,000 $1,750,000 Required a. Prepare the journal entry made by Pack to record the business combination as a statutory merger. b. Prepare the journal entry made by Pack to record the business combination as a stock acquisition.