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 Book Value Fair Value Seaworthy Rope Company Book Value Fair Value $ 101,000 101,000 101,000 410,000 (141,000) $ 572,000 $191,000 156,000 146,000 310,000 $ 15,000 25,000 5,000 218,000 (62.000 $ 201,000 $ 15,000 37,000 10,000 pict 128,000 ure $190,000 Balance Sheet Items Assets Cash & Receivables Inventory Land Plant & Equipment Less: Accumulated Depreciation Total Assets Liabilities & Equities Current Liabilities Capital Stock Capital in Excess of Par Value Retained Earnings Total Liabilities & Equities pict ure $713,000 $ 80,000 $ 27,000 $ 80,000 312,000 28,000 152,000 $ 572,000 $ 27,000 66,000 13,000 95,000 $ 201,880 Pumpworks has 10,400 shares of its $30 par value shares outstanding on January 1, 20X3, and Seaworthy has 4,400 shares of $15 par value stock outstanding. The market values of the shares are $310 and $60, respectively. Required: a. Pumpworks issues 700 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.) Pumpworks has 10,400 shares of its $30 par value shares outstanding on January 1, 20X3, and Seaworthy has 4,400 shares of $15 par value stock outstanding. The market values of the shares are $310 and $60, respectively Required: a. Pumpworks issues 700 shares of stock in exchange for all of Seaworthy's net assets. Prepare a balance sheet forth combined entity immediately following the merger. (Amounts to be deducted should be indicated by minus sign.) PUMPWORKS AND SUBSIDIARY Combined Balance Sheet January 1, 20X3 Liabilities and Equities Assets $ 0 $ 0 Total Liabilities and Equities Total Assets b. Prepare the stockholders' equity section of the combined company's balance sheet, assuming Pumpworks acquires all of Seaworthy's net assets by issuing: 1.1.200 shares of common. 2.1,900 shares of common 3.3.200 shares of common. 1 Capital stock Capital in excess of par value Retained earnings 5 0 2 Capital stock Capital in excess of par value Retained earnings $ 0 3 Capital stock Capital in excess of par value Retained earnings $ 0