On January 4, 2010, Pronti Company acquired all of the net assets of Scott Company for $124,000 cash. The two companies merged with Pronti Company surviving. The balance sheets for each company prior to the merger follow.

Required:
1. How much goodwill was involved in this merger? Show computations.
2. Record the merger by Pronti Company on January 4, 2010.
3. Prepare a consolidated balance sheet immediately after theacquisition.

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Balance Sheets at January 4, 2011 Cash Property and equipment (net) Pronti Company S118,000 132,000 $250,000 Scott Company S23,000 65,000 $88,000 Total assets Liabilities Common stock (par $5) Retained earnings s 27.000 120,000 03,000 S250,000 $12.000 40,000 36,000 $88,000 Total liabilities and stockholders' equity *Determined by Pronti Company to have a market value of $72,000 at date ofacquisition.