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 61,470 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	$	(1,780,000	)
Expenses		1,246,000
Net income	$	(534,000	)
Retained earnings, 1/1	$	(1,004,000	)
Net income		(534,000	)
Dividends declared		149,000
Retained earnings, 12/31	$	(1,389,000	)
Cash	$	148,000			$	107,000			$	107,000
Receivables and inventory		294,000				127,000				112,700
Property, plant, and equipment		2,020,000				518,000				695,500
Trademarks		396,000				226,000				276,200
Total assets	$	2,858,000			$	978,000
Liabilities	$	(594,000	)		$	(201,000	)		$	(201,000	)
Common stock		(400,000	)			(200,000	)
Additional paid-in capital		(475,000	)			(70,000	)
Retained earnings		(1,389,000	)			(507,000	)
Total liabilities and equities	$	(2,858,000	)		$	(978,000	)

In addition, Pacifica assessed a research and development project under way at Seguros to have a fair value of $175,000. Although not yet recorded on its books, Pacifica paid legal fees of $20,600 in connection with the acquisition and $9,200 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.