Q1 )

On December 31, 2010, Peris Company acquired Shanta Company's outstanding stock by paying $200,000 cash and issuing 10,000 shares of its own $30 par value common stock, when the market price was $65 per share. Peris paid legal and accounting fees amounting to $20,000 in addition to stock issuance costs of $12,000.Shanta is dissolved on the date of the acquisition. Balance sheet information for Peris and Shanta immediately preceding the acquisition is shown below, including fair values for Shanta's assets and liabilities.

PerisShantaShanta

Book ValueBook ValueFair Value

Cash490,000$140,000$140,000

Accounts Receivable560,000280,000280,000

Inventory520,000200,000260,000

Land460,000150,000140,000

Plant Assets Net980,000325,000355,000

building380,000170,000190,000

Accounts Payable460,000140,000140,000

Other accrued expenses160,00045,00065,000

Notes Payable800,000460,000480,000

Common Stock ($30 par)960,000

Common Stock ($20 par)200,000

Additional P.I.C192,00080,000

Retained Earnings818,000340,000

Required:

1.Prepare the appropriate entries ( 3 entries)