Current Assets 960,000

Plant and Equipment 1,440,000 Goodwill 336,000 Liabilities 216,000 Cash 2,160,000 Liability for Contingent Consideration 360,000

The amount of the contingency is $500,000 (10,000 shares at $50 per share)

500,000 Part A Goodwill

Paid-in-Capital for Contingent Consideration - Issuable 500,000

500,000 Part B Paid-in-Capital for Contingent Consideration - Issuable

Common Stock ($10 par) 100,000 Paid-In-Capital in Excess of Par 400,000

1. (c) Cost (8,000 shares @ $30) $240,000 Fair value of net assets acquired Excess of cost over fair value (goodwill)

2. (c) Cost (8,000 shares @ $30) $240,000 Fair value of net assets acquired ($90,000 + $242,000 – $56,000) Excess of fair value over cost (gain)

Current Assets 362,000 Long-term Assets ($1,890,000 + $20,000) + ($98,000 + $5,000) 2,013,000 Goodwill * 395,000 Liabilities 119,000 Long-term Debt 491,000

720,000 Common Stock (144,000 $5)

1,440,000 Other Contributed Capital (144,000 $15 - $5))

* (144,000 $15) – [$362,000 + $2,013,000 – ($119,000 + $491,000)] = $395,000

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