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 55,370 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: Pacifica Seguros Book Values Seguros Fair Values Revenues $ (1,320,000 ) Expenses 924,000 Net income $ (396,000 ) Retained earnings, 1/1 $ (1,035,000 ) Net income (396,000 ) Dividends declared 174,000 Retained earnings, 12/31 $ (1,257,000 ) Cash $ 120,000 $ 90,000 $ 90,000 Receivables and inventory 726,000 321,000 303,100 Property, plant, and equipment 1,540,000 465,000 625,000 Trademarks 340,000 182,000 224,800 Total assets $ 2,726,000 $ 1,058,000 Liabilities $ (594,000 ) $ (276,000 ) $ (276,000 ) Common stock (400,000 ) (200,000 ) Additional paid-in capital (475,000 ) (70,000 ) Retained earnings (1,257,000 ) (512,000 ) Total liabilities and equities $ (2,726,000 ) $ (1,058,000 ) In addition, Pacifica assessed a research and development project under way at Seguros to have a fair value of $112,000. Although not yet recorded on its books, Pacifica paid legal fees of $22,500 in connection with the acquisition and $10,400 in stock issue costs. a. Prepare Pacificas entries to account for the consideration transferred to the former owners of Seguros, the direct combination costs, and 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.