On December 31, 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 54060 newly issued Pacifica common shares ($20 market value, $5 par value) and an agreement to pay an additional $130,000 cash Il Seguros meets certain project completion goals by December 31 of the following year 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: Revenues Experises Net income Retained earnings, 1/1 Net incose Dividonds declared Retained earnings, 12/31 Cash Receivables and Inventory Property, plant, and equipment Trademarks Total assets abilities Common stock Additional paid-in capital Retained earnings Total lisbilities and equities Seguros Seguros Pacifica Book Values Fair values 5(2,050,000) 1,435,000 5 (615,000) 5 (953,000) (615, 000) 90.000 $(1,478,000) 5 162.000 $147.000 $ 147,00 796,000 68,000 24,600 1,580,000 478,000 651,000 354.000 231.000 275,600 5 2,892,000 $ 936,000 $ (539,090) 5 (198,000) $ (198,000) (400,000 (200,000) (475,000 (70,000) (1,478,000 (468,000 $(2,892,880) 3 4936,000) In addition Pacifica assessed a research and development project under way at Seguros to have a fair value of $18,000 Although not yet recorded on its books, Pacifica paid legal fees of $17.100 in connection with the acquisition and $11,500 in stock issue costs a: Prepare Pacifica's entries to account for the consideration transferred to the former owners of Seguros, the direct combination costs. mind the stock issue and registration costs. b&c. Present a worksheet showing the postacquisition column of accounts for Pacifica and the consolidated balance sheet as of the acquisition date Complete this question by entering your answers in the tabs below. U Band Complete this question by entering your answers in the tabs below. Reg A Req B and C Prepare Pacifica's entries to account for the consideration transferred to the former owners of Seguros, the direct combination costs and the stock issue and registration costs. (Use a 0.961538 present value factor where applicable. If no entry is required for a transaction/eventselect "No journal entry required in the first account field.) View transaction list Xi 1 Record the acquisition of Seguros Company 2 Record the legal fees related to the combination Record the payment of stock Issuance costs. Credit Journal entry has been entered Record only Clear entry View general journal Regis and C > codent wocheo chowing the posticulation column of accounts for Pacific and the consolidated balance that of this kquisto date coaccount wit multiple consolidation entiles are required, combine all debitantes into one amount end thout in the debt column of the worksheet Simild combine all credit rates into one amount and enter this amount in the credit column of the worksheet. Round your answers to the nearest whole dollar) Show less DURCANO SEGUROSCO Consolidation World fol Y Endin December 31 commodation Eriti Account Pocilico SO Debit Credit Consolidated Totals Revenues Expenses Net Income Ratained earnings 1/1 Not income Dlvidends declared Retained earings: 12/31 Cash Receivables and inventory Property, plant and equipment Investment in Seguros Research and development annet Good Trademark Total anses Liabilities Contingent performance obligation Common stock Additional paid in capital Retained earnings Total abilities and equitos Rega
