Problem

Comparative balance sheets for Pin and San Corporations at December 31, 2010, are as follo...

Comparative balance sheets for Pin and San Corporations at December 31, 2010, are as follows (in thousands):

 

Pin

San

Current assets

$1,040

$ 480

Land

400

800

Buildings—net

2,400

800

Equipment—net

1,760

1,920

Total assets

$5,600

$4,000

Current liabilities

$ 400

$ 480

Capital stock, $10 par

4,000

1,600

Additional paid-in capital

400

1,120

Retained earnings

800

800

Total equities

$5,600

$4,000

On January 2, 2011, Pin issues 120,000 shares of its stock with a market value of $40 per share for all the outstanding shares of San Corporation in an acquisition. San is dissolved. The recorded book values reflect fair values, except for the buildings of Pin, which have a fair value of $3,200,000, and the current assets of San, which have a fair value of $800,000.

Pin pays the following expenses in connection with the business combination:

Costs of registering and issuing securities

$120,000

Other direct costs of combination

200,000

REQUIRED: Prepare the balance sheet of Pin Corporation immediately after the acquisition.

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