(Problem 6.5) On dely 31, 2005. Pyr Corporation issued 20,000 shares of its $2 par cotarmon stock (ea rent fair value $10 a share) for al 5,000 shares of outstanding S5 par comzon stock of Soper Company, which was to remain a separate corporation. Out-ot pocket costs of t business coimhination, paid by Pyr on July 31, 2005, are shown below CHECK FIGURE b. Consolidated goodwill, 35,000. Finder's and legal fees related to business combinatian Costs associated with SEC registration statement for Pyr comman stock Total out-of-pocket costs of business cormbination pter 6 Comsoliiaued Financiai Statements: On Dute of Busimess Cambaination 253 The constitucnt companies' separate balancc sheets on July 31, 2005, prior to the busi- ness combination, follow: PYR CORPORATION AND SOPER COMPANY Separate Balance Sheets (prior to business combination) July 31, 2005 Pyr Soper Corporation Company Assets $ 300,000 150,000 Current assets Plant assets(net) Goodwill 300,000 20,000 S470,000 2,400,000 53,200,000 Total assets Liabilities and Stockholders' Equity 400,000 1,000,000 800,000 $120,000 200,000 Current liabilities Long-terrm debt Common stock, $2 par Common stock, $5 par Additional paid-in capital Retained earnings 25,000 50,000 75,000 5470,000 400,000 600,000 $3,200,000 Total liabilities and stockholders' equity Soper's goodwill, which bad rsulted from its July 31, 2001, acquisition of the net assets Soper's asscts and liabilities having July 31, 2005, current fair values different from their of Solo Company, was not impaired. carrying amounts were as follows: Current Fair Values $ 65,000 340,000 190,000 Carrying Amounts : Invntories Plant assets (net) Long-term debt 60,000 300,000 200,000 There were oo intercompany transactions prior to the business combination, and there was no contingent consideration in connection with the combination. Instructions a. Prepare Pyr Corporation's journal entries on July 31,200S, to.record the business com bination with Soper Company. (Disregard income taxes) b. Prepare a working paper climination (in journal entry format) and the rclated working pa- per for consolidated balance sheet of Pyr Corporation and subsidiary on July 31,2005. Amounts in the working papers should reflect the journal cntries in (a). (Disregard in- come taxes.)