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 51,695 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 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 Expenses Net income Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Cash Receivables and inventory Property, plant, and equipment Trademarks Total assets Liabilities Common stock Additional paid-in capital Retained earnings Total liabilities and equities Seguros Seguros Book Fair Pacifica Values Values $(1,810,000) 1,267,000 $ (543,000) $(1,031,000) (543,000) 96,000 $(1,478,000) $ 198,000 $ 134,000 $ 134,000 267,000 89,000 74,400 2,000,000 446,000 598,500 398,000 240,000 299,000 $ 2,863,000 $ 909,000 $ (510,000) $ (204,000) $ (204,000) (400,000) (200,000) (475,000) (70,000) (1,478,000) (435,000) $(2,863,000) $ (909,000) Journal entry worksheet