Problem 1: Here are the trial balances forthe Plenty Company

and the Scarce Company just before the books were

closed on December 31, 2019. Fair market values for

selected Scarce Company accounts are shown.

PlentyCo trisl balance ScarceCo Trial balance Scarceco fair mkt

Current assets 170000 65000 75000

Noncurrent assets (net) 255000 105000 140000

Liabilities -65000 -45000 -45000

Common Stock (Par) $25 ___ -300000

Common Stock (Par) $50 ___ -60000

Additional paid in capital ___ -10000 -20000

Retained earnings 1/1/19 ___ -60000 -25000

Revenues ___ -110000 -90000

Expenses __ 120000 70000

On December 31 , 2019, Plenty Company purchased 100% of Scarce Company's stock by issuing 4,500 shares of its own stock and

paying $100,000 cash. On that date, the market value of Plenty

Company's stock was $36 per share. There were no combination costs or stock issuance costs. Scarce Company was dissolved immediately alter the takeover

and no longer existed independently. Make all necessary journal entries in Plenty Company's records

to recognize this acquisition.