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Pintime Industries Incorporated entered into a business combination agreement with Sydrolized Chemical Corporation (SCC) to ensure an uninterrupted supply of key raw materials and to realize certain economies from combining the operating processes and the marketing efforts of the two companies. Under the terms of the agreement, Pintime issued 181,300 shares of its $2 par common stock in exchange for all of SCCs assets and liabilities. The Pintime shares then were distributed to SCCs shareholders, and SCC was liquidated.

Immediately prior to the combination, SCCs balance sheet appeared as follows, with fair values also indicated:

	Book Values	Fair Values
Assets
Cash	$ 18,000	$ 18,000
Accounts Receivable	257,000	252,000
Less: Allowance for Bad Debts	(5,000)
Inventory	375,000	389,000
Long-Term Investments	142,000	167,000
Land	46,000	88,000
Rolling Stock	111,000	46,000
Plant and Equipment	2,423,000	2,495,000
Less: Accumulated Depreciation	(608,000)
Patents	116,000	497,000
Special Licenses	94,700	99,800
Total Assets	$ 2,969,700	$ 4,051,800
Liabilities
Current Payables	$ 137,700	$ 137,700
Mortgages Payable	508,000	528,000
Equipment Trust Notes	104,000	99,000
Debentures Payable	1,050,000	1,000,000
Less: Discount on Debentures	(42,000)
Total Liabilities	$ 1,757,700	$ 1,764,700
Stockholders Equity
Common Stock ($6 par)	582,000
Additional Paid-In Capital from Common Stock	508,000
Additional Paid-In Capital from Retirement of Preferred Stock	22,000
Retained Earnings	119,000
Less: Treasury Stock (1,100 shares)	(19,000)
Total Liabilities and Equity	$ 2,969,700

Immediately prior to the combination, Pintimes common stock was selling for $14 per share. Pintime incurred direct costs of $146,000 in arranging the business combination and $43,000 of costs associated with registering and issuing the common stock used in the combination.

1) Record the purchase of SCC.

2) Record the sale of assets and liabilities.

3) Record the retirement of Treasury Stock.

4) Record the retirement of SCC stock and distribution of Pintime Industries stock.

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