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On December 3 1 , Pacifica Inc., acquired 1 0 0 percent of the voting stock of Seguros Company. Pacifica will maintain Seguros as a
On December Pacifica Inc., acquired percent of the voting stock of Seguros Company. Pacifica will maintain Seguros as a wholly owned subsidiary with its own legal and accounting identity. The consideration transfered to the owner of Seguros included newly issued Pacifica common shares $ market values, $ par value and an agreement to pay an additional $ cash if Seguros meets certain proejct completion goals by December of the following year. Pacifica estimates a percent probability that Seguros will be successful in meeting these goals and uses a percent discount rate to represent the time value of money. Immediately prior to the acquistion, the following data for both firms were available: Pacifica Seguros Book Values Seguros Fair Values Revenues $ Expenses Net Income $ Retained earnings, $ Net income Dividends declared Retained earnings, $ Cash $ $ $ Receivables and inventory Property, plant, and equipment Trademarks $ Total assets $ $ Liabilites $ $ $ Common Stock Additional paidin capital Retained earnings Total liabilies and equities $ $ In addition, Pacifica assessed a research and development project under way at Seguros to have a fair value of $ Although not yet recorded on its books, Pacifica paid legal fees of $ in connection with the acquisition and $ in stock issue costs. Prepare the following: Pacifica's journal entries to record the consideration transferred to the former owners of Seguros, the direct combination costs, and the stock issue and registration costs. Use a present value factor where applicable. A postacquistion column of account for Pacifica. A worksheet to produce a consolidated balance sheet as of the acquisition date.
On December Pacifica Inc., acquired percent of the voting stock of Seguros Company. Pacifica will maintain Seguros as a wholly owned subsidiary with its own legal and accounting identity. The consideration transfered to the owner of Seguros included newly issued Pacifica common shares $ market values, $ par value and an agreement to pay an additional $ cash if Seguros meets certain proejct completion goals by December of the following year. Pacifica estimates a percent probability that Seguros will be successful in meeting these goals and uses a percent discount rate to represent the time value of money.
Immediately prior to the acquistion, the following data for both firms were available:
Pacifica Seguros Book Values Seguros Fair Values
Revenues $
Expenses
Net Income $
Retained earnings, $
Net income
Dividends declared
Retained earnings, $
Cash $ $ $
Receivables and inventory
Property, plant, and equipment
Trademarks $
Total assets $ $
Liabilites $ $ $
Common Stock
Additional paidin capital
Retained earnings
Total liabilies and equities $ $
In addition, Pacifica assessed a research and development project under way at Seguros to have a fair value of $ Although not yet recorded on its books, Pacifica paid legal fees of $ in connection with the acquisition and $ in stock issue costs.
Prepare the following:
Pacifica's journal entries to record the consideration transferred to the former owners of Seguros, the direct combination costs, and the stock issue and registration costs. Use a present value factor where applicable.
A postacquistion column of account for Pacifica.
A worksheet to produce a consolidated balance sheet as of the acquisition date.
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