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 50,000 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.

Required: Complete the following steps:

1. Prepare Pacifica's entries to account for the business combination transaction. Add a tab to an excel file labeled Bus Comb Entries and record your answer.

2. Add a third tab to the spreadsheet. Label it Consol Entries. Prepare the consolidation entries in journal entry format, label them according to convention: S,A

3. Complete the consolidation worksheet by cross-referencing into it and selecting the appropriate consolidation entry reference letter.

Seguros Company outstanding voting shares acquired by Pacifica Inc. 100% Pacifica Company's $5 par common stock issued for acquisition - number of shares Market value of Pacifica stock at acquisition date Cash paid by Pacifica when Seguros meets certain goals Fair value of Seguros R \& D project Probability that Seguros will meet goals Discount rate used to represent time value of money Legal fees paid by Pacifica in connection with acquisition Stock issuance costs paid by Pacifica $$$$100%50,00020130,000100,00050%4%15,0009,000