Prepare stockholders’ equity section
The stockholders’ equities of Pal Corporation and Sip Corporation at January 1 were as follows (in thousands):
|
Pal |
Sip |
|
|
Capital stock, $10 par |
$3,000 |
$1,600 |
|
Other paid in capital |
400 |
800 |
|
Retained earnings |
1,200 |
600 |
|
Stockholders’ equity |
$4,600 |
$3,000 |
On January 2, Pal issued 300,000 of its shares with a market value of $20 per share for all of Sip’s shares, and Sip was dissolved. On the same day, Pal paid $10,000 to register and issue the shares and $20,000 for other direct costs of combination.
REQUIRED: Prepare the stockholders’ equity section of Pal Corporation’s balance sheet immediately after the acquisition on January 2.