Problem 1-30 (Algo) Business Combination with Goodwill LO 1-5 Pancor Corporation paid cash of $175,000 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 Assets Cash Accounts Receivable Pancor Corporation Sink Company Book Value Book Value Fair Value $ 13,000 31,000 Inventory Patents Buildings and Equipment Less: Accumulated Depreciation Total Assets Liabilities and Equities Accounts Payable Notes Payable Common Stock: $10 par value $8 par value $ 880,000 $ 262,000 $ 82,000 137,000 $ 243,000 157,000 178,000 87,000 397,000 (182,000) $ 13,000 31,000 32,000 55,000 323,000 (192,000) $ 60,000 127,000 46,000 56,000 141,000 $ 287,000 $ 60,000 127,000 193,000 12,000 Additional Paid-In Capital Retained Earnings Total Liabilities and Equities Required: 159,000 309,000 10,000 53,000 $ 880,000 $ 262,000 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 $175,000.