Asset acquisition vs. stock acquisition (fair value is different from book value)The following financial statement information is for an investor company and an investee company on January 1, 2016. On January 1, 2016, the investor company’s common stock had a traded market value of $35 per share, and the investee company’s common stock had a traded market value of $31 per share. Book Values Fair ValuesInvestor Investee Investor InvesteeReceivables & inventories $150,000 $75,000 $135,000 $67,500Land 300,000 150,000 450,000 225,000Property & equipment 337,500 150,000 375,000 195,000Trademarks & patents — — 225,000 120,000Total assets $787,500 $375,000 $1,185,000 $607,500Liabilities $225,000 $120,000 $270,000 $142,500Common stock ($1 par) 30,000 15,000 Additional paid-in capital 420,000 225,000 Retained earnings 112,500 15,000 Total liabilities & equity $787,500 $375,000 Net assets $562,500 $255,000 $915,000 $465,000Required (Parts a. and b. are independent of each other.)a. Assume that the investor company issued 14,250 new shares of the investor company’s common stock in exchange for all of the individually identifiable assets and liabilities of the investee company. The financial information presented, above, was prepared immediately before this transaction. Provide the Investor Company’s balances (i. e., on the investor’s books, before consolidation) for the following accounts immediately following the acquisition of the investee’s net assets:Receivables & Inventories Land Property & Equipment Trademarks & Patents Investment in Investee Goodwill Total Assets Liabilities Common Stock ($1 par) Additional Paid-In Capital Retained Earnings Total Liabilities and Equity b. Assume that the investor company issued 14,250 new shares of the investor company’s common stock in exchange for all of the investee company’s common stock. The financial information presented, above, was prepared immediately before this transaction. Provide the Investor Company’s balances (i. e., on the investor’s books, before consolidation) for the following accounts immediately following the acquisition of the investee’s net assets:Receivables & Inventories Land Property & Equipment Trademarks & Patents Investment in Investee Goodwill Total Assets Liabilities Common Stock ($1 par) Additional Paid-In Capital Retained Earnings Total Liabilities and Equity