Pintime Industries Inc. entered into a business combination agreement with Sydrolized Chemical Corporation (SCC) to ensure an uninterrupted supply of key raw materials and to realize certain economies from combining the operating processes and the marketing efforts of the two companies. Under the terms of the agreement, Pintime issued 181,700 shares of its $2 par common stock in exchange for all of SCC's assets and liabilities. The Pintime shares then were distributed to SCC's shareholders, and SCC was liquidated. Immediately prior to the combination, SCC's balance sheet appeared as follows, with fair values also indicated: Assets Cash Accounts Receivable Less: Allowance for Bad Debts Inventory Long-Term Investments Land Rolling Stock Plant & Equipment Less: Accumulated Depreciation Patents Special Licenses Total Assets Liabilities Current Payables Mortgages Payable Book Values Fair Values $ 27,000 $ 27,000 254,000 249,100 (4,900) 378,000 392,000 132,000 157,000 38,000 95,000 115,000 51,000 2,417,000 2,490,000 (602,000) 110,000 483,000 94,400 98,500 $2,958,500 $4,042,600 $ 137,500 $ 137,500 500,000 520,000 Equipment Trust Notes 104,000 99,000 Debentures Payable 1,010,000 960,000 Less: Discount on Debentures (49,000) Total Liabilities $1,702,500 $1,716,500 Stockholders' Equity Common Stock ($6 par) 596,000 Additional Paid-In Capital from Common Stock 500,000 Additional Paid-In Capital from Retirement of Preferred Stock 18,000 Retained Earnings 155,000 Less: Treasury Stock (1,200 shares) Total Liabilities & Equity (13,000) $2,958,500 Immediately prior to the combination, Pintime's common stock was selling for $14 per share. Pintime incurred direct costs of $145,000 in arranging the business combination and $51,000 of costs associated with registering and issuing the common stock used in the combination.