Required information [The following information applies to the questions displayed below] Pumpworks Inc. and Seaworthy Rope Company agreed to merge on January 1, 20X3. On the date of the merger agreement, the companies reported the following data: Pumpworks Seaworthy Rope Company Balance Sheet Items Book Value Fair Value Book Value Fair Value Assets Cash & Receivables $ 109,000 $109,000 $ 19,000 $ 19,000 Inventory 107,000 168,000 29,000 41,000 Land 107,000 160,000 9,000 14,000 Plant & 409,000 309,000 219,000 Equipment 123,000 Less: picture picture Accumulated (131,000) (71,000) Depreciation. Total Assets$ 601,000 $746,000 $205,000 $197,000 Liabilities & Equities Current $ 77,000 Liabilities Capital 327,000 $ 77,000 $28,000 73,500 $ 28,000 Stock Capital in Excess of 22,000 7,000 Par Value Retained 175,000 96,500 Earnings Total $205,000 Liabilities $ 601,000 & Equities Pumpworks has 10,900 shares of its $30 par value shares outstanding on January 1, 20X3, and Seaworthy has 4,900 shares of $15 par value stock outstanding. The market values of the shares are $310 and $70, respectively. Required: a. Pumpworks Issues 900 shares of stock in exchange for all of Seaworthy's net assets. Prepare a balance sheet for the combined entity immediately following the merger. (Amounts to be deducted should be indicated by minus sign.) Assets PUMPWORKS AND SUBSIDIARY Combined Balance Sheet January 1, 20X3 Liabilities and Equities Total Assets Total Liabilities and Equities