Parvin Corporation issues 40,000 shares of its own $10 par common stock for all the outstanding stock of Sacks Corporation in merger consummated on October 1, 2017 (Sacks Corporation dissolved). On this date, Parvin Corporation paid $10,000 for direct cost, and $3,000 for indirect cost of business combination as well as $5,000 for cost of printing and issuing new shares.

Summary balance sheet data for the two companies at October 1, 2017, just before combination, are as follow:

Parvin CorporationSacks Corporation

Book ValueFair ValueBook ValueFair Value

Cash$ 200,000$ 200,000$ 50,000$ 50,000

Inventory800,000900,000150,000200,000

Land1,000,0001,300,000300,000400,000

Equipment net3,000,0002,900,000400,000350,000

Patent------------200,000

Total assets$5,000,000$5,300,000$ 900,000$1,200,000

Accounts Payable$1,200,000$1,200,000$200,000$250,000

Common stock--$10 par3,000,000350,000

Additional paid-in capital300,000100,000

Retained earnings500,000250,000

Total Equities$5,000,000 $ 900,000

1. Assuming the market value of Parvin Corporation stock is $30:

a. How to prepare the journal entries in Parvin's book for the acquisition of Sacks' net assets.

b. How to prepare Parvin Corporation Balance sheet right after the acquisition.

2. Assuming the market value of Parvin Corporation stock is $15:

a. How to prepare the journal entries in Parvin's book for the acquisition of Sacks' net assets.

b. How to prepare Parvin Corporation Balance sheet right after the acquisition