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 56,050 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: Seguros Book Values Seguros Fair Values Pacifica $(1,730,000) 1,211,000 Revenues Expenses Net income (519,000) $ (958,000) (519,000) 120,000 Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 $(1,357,000) $ 154,000 Cash Receivables and inventory 167,000 349,000 154,000 146,000 543,000 188,000 127,100 Property, plant, and equipment 1,970,000 318,000 723,500 Trademarks 243,400 $1,031,000 Total assets 2,804,000 (572,000) $ (245,000) (400,000) (475,000) (1,357,000) $(2,804,000) Liabilities (245,000) (200,000) (70,000) (516,000) Common stock Additional paid-in capital Retained earnings Total liabilities and equities $(1,031,000) In addition, Pacifica assessed a research and development project under way at Seguros to have a fair value of $101,000. Although not yet recorded on its books, Pacifica paid legal fees of $19,700 in connection with the acquisition and $8,600 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, 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. Consolidated Accounts Pacifica Seguros Debit Credit Totals Revenues Expenses Net income Retained earnings, 1/1 Net income Dividends declared Retained earnings, 12/31 Cash Receivables and inventory Property, plant and equipment Investment in Seguros Research and development asset Goodwill Trademarks Total assets 0 0 $ Liabilities Contingent performance obligation Common stock Additional paid-in capital Retained earnings