On December 31, 2014, Pacifica, Inc., acquired 100 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 transferred to the owner of Seguros included 56,105 newly issued Pacifica common shares ($20 market value, $5 par value) and an agreement to pay an additional $130,000 cash if Seguros meets certain project completion goals by December 31, 2015. Pacifica estimates a 50 percent probability that Seguros will be successful in meeting these goals and uses a 4 percent discount rate to represent the time value of money Immediately prior to the acquisition, the following data for both firms were available: Seguros Seg PacificaBook Values Fair Values S(1,480,000) 1,036,000 s (444,000) $(1,003,000) Expenses Net income Retained eamings, 1/1/14 Net income (444,000) Dividends declared 167,000 Retained earnings, 12/31/14 s(1,280,000) Cash Receivables and inventory Property, plant, and equipment Trademarks $ 137,000 96,000 96,000 77.200 2,000,000 507,000 706,000 351,000 235,000 292,400 94,000 Total assets $ 2,683,000 $ 932,000 Liabilities Common stock Addtional paid-in capital Retained earnings s (528,000) $(214,000) $(214,000) 400,000) (200,000) 475,000) (70,000) (1.280,000) (448,000) Total liabilities and equities S(2.683,000) (932,000) Note: Parentheses indicate a credit balance in addition, Pacifica assessed a research and development project under way at Seguros to have a fair value of $129,000 Although not yet recorded on its books, Pacifica paid legal fees of $18,000 in connection with the acquisition and $9,100 in stock issue costs. Type, here to serch