Pintime Industries Incorporated 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 180,300 shares of its $1 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 and Equipment Less: Accumulated Depreciation Patents Special Licenses Total Assets Liabilities Current Payables Mortgages Payable Equipment Trust Notes Debentures Payable Less: Discount on Debentures Total Liabilities Stockholders' Equity Common Stock ($5 par) Book Values Fair Values $ 25,000 258,000 $ 25,000 253,300 (4,700) 371,000 385,000 135,000 160,000 48,000 82,000 125,000 59,000 2,410,000 2,482,000 480,000 99,000 (611,000) 106,000 95,300 $ 2,957,600 $ 138,500 507,000 108,000 1,080,000 (54,000) $ 1,779,500 599,000 507,000 12,000 $ 4,025,300 $ 138,500 527,000 103,000 1,030,000 $ 1,798,500 Additional Paid-In Capital from Common Stock Additional Paid-In Capital from Retirement of Preferred Stock Retained Earnings Less: Treasury Stock (1,200 shares) Total Liabilities and Equity 77,100 (17,000) $ 2,957,600 Immediately prior to the combination, Pintime's common stock was selling for $15 per share. Pintime incurred direct costs of $149,000 in arranging the business combination and $49,000 of costs associated with registering and issuing the common stock used in the combination.