Question
Pancor Corporation paid cash of $164,000 to acquire Sink Company's net assets on February 1, 20X3. The balance sheet data for the two companies
Pancor Corporation paid cash of $164,000 to acquire Sink Company's net assets on February 1, 20X3. The balance sheet data for the two companies and fair value information for Sink immediately before the business combination were: Balance Sheet Item Pancor Corporation Book Value Sink Company Book Value Fair Value $ 18,000 35,000 $ 18,000 35,000 45,000 $ 252,000 141,000 176,000 87,000 393,000 (172,000) 31,000 49,000 320,000 (182,000) $ 271,000 $ 61,000 123,000 54,000 135,000 $ 287,000 $ 61,000 123,000 Assets Cash Accounts Receivable Inventory Patents Buildings and Equipment Less: Accumulated Depreciation Total Assets $ 877,000 Liabilities and Equities Accounts Payable Notes Payable Common Stock: $8 par value $6 par value $ 82,000 130,000 185,000 Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Required: 160,000 320,000 12,000 8,000 67,000 $ 877,000 $ 271,000 a. Prepare the journal entry recorded by Pancor Corporation when it acquired Sink's net assets. b. Prepare a balance sheet for Pancor immediately following the acquisition. c. Prepare the journal entry to be recorded by Pancor if it acquires all of Sink's common stock for $164,000. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a balance sheet for Pancor immediately following the acquisition. Note: Amounts to be deducted should be indicated by minus sign. PANCOR CORPORATION AND SINK COMPANY Combined Balance Sheet February 1, 20X3 Assets Liabilities and Equities Cash Accounts receivable Inventory Patents Buildings and equipment Accumulated depreciation Goodwill Accounts payable Notes payable Common stock Additional paid-in capital Retained earnings Total Assets 0 Total Liabilities and Equities
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