Problem 2-2 Stockholders of Acme Company, Baltic Company, and Colt Company are considering alternative arrangements for a business combination. Balance sheets and the fair values of each company's assets on October 1, 2014, were as follows: Assets Liabilities Common stock, $20 par value Other contributed capital Retained earnings (deficit) Total equities Fair values of assets Acme $3,895,500 $2,010,370 1,999,900 -0- (114,770) $3,895,500 $4,213,860 Baltic $7,503,300 $2,181,320 1,808,170 603,270 2,910,540 $7,503,300 $8,943,100 Colt $951,740 $260,940 544,830 191,450 (45,480) $951,740 $1,301,770 Acme Company shares have a fair value of $51. A fair (market) price is not available for shares of the other companies because they are closely held. Fair values of liabilities equal book values. Prepare a balance sheet for the business combination. Assume the following: Acme Company acquires all the assets and assumes all the liabilities of Baltic and Colt Companies by issuing in exchange 139,830 shares of its common stock to Baltic Company and 39,740 shares of its common stock to Colt Company. (List assets in order of liquidity. Enter negative account balance with negative sign preceding the number e.g. -5,125 or parentheses e.g. (5,125).) ACME COMPANY Balance Sheet October 1, 2014 Assets Assets (except goodwill) 13140370 Goodwill 10261370 Total Assets 23401740 Liabilities and Stockholders' Equity Liabilities 12255240 Common Stock 5591300 Other Contributed Capital 5566670 Retained Earnings -114700 Total Liabilities and Stockholders' Equity 23401740